What Is Occupational Accident Insurance?

bizfluent article image

Jirsak/iStock/Getty Images

Occupational accident insurance is a specialty business insurance primarily used to cover independent trucking contractors. It combines several common types of insurance into a single package that allows customers to operate their rigs with financial security, knowing that their medical and other casualty bills will be covered if something adverse occurs on the job.

Independent Truckers

Although workers' compensation is required for all large companies in nearly every state, independent contractors are generally excluded from states' coverage requirements. PropertyCasualty360.com cites Bureau of Transportation Statistics stating that truckers who own their own trucks and operate as independent contractors haul nearly 45 percent of the total value of freight shipped by trucks in the United States. This means that a significant portion of trucking industry workers operate without workers' compensation insurance, and need a different type of coverage.

Different from Workers' Comp

Although occupational accident insurance is an alternative to workers' compensation for truckers who do not qualify for it, it is a different type of insurance coverage and is not meant to replace workers' comp for workers who otherwise do qualify. Workers' comp has no stated benefit limit for workplace injuries and illnesses, whereas occupational accident insurance does contain limits for medical benefits, like standard health insurance. Additionally, workers' compensation includes employer liability coverage to prevent injured workers from suing their employers. Occupational accident insurance does not contain this protection.

Package Policy

Standard occupational accident insurance contains several coverages combined into a single package policy. Because of the wide range of hazards that truckers face regularly, this policy offers some aspects of life, injury, health and disability insurance. It typically pays benefits for the trucker's death, dismemberment, injuries, illnesses and disabilities that prevent him from returning to work. Combining these benefits into a single policy can be much more convenient, and likely more affordable, than purchasing individual policies to provide the same level of coverage.

Offered by Motor Carriers

Occupational accident insurance is typically offered by the motor carrier company that hires the independent trucking contractors, though the truckers themselves typically pay the premiums with a deduction from their compensation for the job. This allows contractors to distinguish themselves from a company's employees, yet still receive protection from the carrier for whom they are working. Carriers often make occupational accident insurance available to contractors but cannot force them to buy it. This arrangement also allows carriers to avoid workers' compensation mandates and the corresponding premiums, which can be quite high for the trucking industry.