June 23, 2016 | By Marcee Wardell |
Workers’ compensation is a state-regulated program, and is required of employers who employ three or more employees at any one time, or employ one or more employees for 35+ hours per week for 13 or more weeks by law in most states. It may cover wage-loss benefits, medical treatment, and rehabilitation—related medical expenses—for employees who suffer a work-related injury or illness. Workers’ compensation also includes employer liability coverage, which may provide protection to an employer if an employee sues the employer in indirect relation to a workers’ compensation claim, often covering legal defense costs, up to the policy limits. Workers’ compensation doesn’t eliminate the issues of an unsafe workplace, however, and employers have a responsibility to maintain a safe working environment for their employees.
Occupational accident insurance may provide medical, disability, and accidental death and dismemberment benefits, but it’s not workers’ compensation—it isn’t state-regulated or state statutory. Occupational accident policies may cover wage-loss benefits, medical treatments, and rehabilitation for employees or covered independent contractors, but only up to the policy limits. Employers are allowed to choose their coverage and deductible amounts, based upon the employer’s perceived risk.
While workers’ compensation policies typically involve a higher cost to the employer, they may offer more comprehensive coverage, particularly in terms of employer liability, which is not a component of occupational accident coverage. However, individuals who qualify as independent contractors are not always covered under state workers’ compensation laws; while employee classification is determined by the federal government, workers’ compensation laws are determined by the state government. For these individuals, employers may want to consider occupational accident coverage.
For a useful infographic delineating the differences between workers’ compensation and occupational accident policies, click here. For more information on this and other insurance topics and coverage, please call our office.