Many companies have heard of workers’ compensation insurance, mostly because it’s necessary to have per state laws. But what about occupational accident insurance? In simple terms, workers’ compensation insurance provides wage replacement and medical benefits to employees, whereas occupational accident insurance provides similar coverage, but for independent contractors.
The type of insurance coverage you need as a business depends on your workforce, the risk you’re assuming, and your state’s individual laws on employee coverage. And now, in the age of COVID-19, with more people working at home or in different settings altogether, the importance of proper employee coverage is more crucial than ever.
Here’s a look at both kinds of coverage and which one is right for your business.
What is Occupational Accident Insurance?
Occupational accident coverage does provide a level of coverage for accidents or injuries while a person is working. It is an optional piece of coverage and usually costs about half as much as a workers’ compensation package, which makes it more attractive for businesses. It may be a better fit for companies that don’t need all of the benefits of a comprehensive workers’ comp policy provides.
Occupational accident insurance also covers lost wages, medical expenses, and death benefits up to the policy limit. Also, companies can choose the deductible, disability coverage, and limits they want to buy. However, this coverage usually provides little to no legal expenses. Since policies don’t include defense costs, business owners need to understand that they’re assuming financial risk.
Workers’ Compensation Insurance
Most business owners choose workers’ compensation over occupational accident insurance for various reasons. While occupational insurance is cheaper, traditional workers’ compensation is more well-rounded. This is a state-regulated policy that pays certain lost wages and all medical expenses. Payouts for worker injuries and deaths meet at least minimum requirements and they can also exceed policy limits.
Unlike lawsuits related to occupational accidents, the burden of proof lies with the worker, not the company they work for. The plaintiff has to prove the injury or illness caused their condition. As well, under this kind of coverage’s laws, a person cannot sue for pain and suffering and cannot receive a judgment for punitive damages.
Since workers’ compensation provides more protection than occupational accident coverage, it is less likely that a company will face a lawsuit.
Choosing the Right Insurance Policy
If you choose the wrong coverage, it could expose your business to financial obligations beyond what you can handle financially. This is troubling for business owners since very few statutory limitations exist for occupational accident litigation. In theory, an injured person could sue at any time they want.
Lawsuits by aggrieved persons are usually lengthy, costly, and challenging. In consequence, it is crucial you have the right level of policy limitations. Policy limits vary from $1 million to $5 million, and employees potentially win judgments reaching the limit for pain and suffering.
About InsureMyWorkComp & Their Workers Comp Solutions
InsureMyWorkComp is a digital brokerage that helps clients find the right workers’ compensation solution for their business needs, such as occupational accident insurance. Unlike other online platforms, we will help you to work with an agent who can provide you the right solution for your risk profile. Our staff has over 50 years of workers’ compensation underwriting and sales experience, and we are confident that we will provide you the support that you need. For more information or to get a quote, contact us today at (855) 340-9138.