Truckers & Contractors Occupational Accident Insurance

If you are looking for an occupational accident insurance definition, this is a policy that is designed to offer benefits to independent contractors and drivers who are not covered under a workers compensation policy.

Here are some interesting facts about how and why employers choose this coverage:

• Alternative to workers comp: In some states, an employer can choose to opt out of their state's workers compensation law. However, the employer still has the same legal obligation to employees who suffer injury or death on the job. An occupational accident insurance policy gives the employer the means to fund most or all of this obligation at a lower cost than a workers compensation policy.
• Independent Contractor coverage in the trucking industry: Many trucking companies use occupational accident insurance for truckers to fund benefits for owner-operators who are not employees. Trucking companies like to have this coverage in place because, in some circumstances, owner-operators may be deemed to have become employees or they may assert that they are employees and file an injury claim against the employer.

With a workers compensation policy, you get statutory benefits, but with an occupational accident insurance policy, you must make the following choices:

• The limit of liability to carry per accident
• The deductible to assume per accident
• The level of disability coverage to provide
• The level of death benefit to provide

As a motor carrier you will be responsible for any legal obligation to an Independent Contractor not covered by an occupational accident insurance coverage. If you choose the wrong coverage options, you may expose yourself to financial obligations larger than what you may be equipped to handle.

Just ask your local independent insurance agent to contact an NTA agent who can provide the assistance you need to address your risks and concerns. Your agent can also identify and provide the complete range of business insurance your company needs.

How Occupational Accident Insurance Protects You

Occupational accident insurance coverage provides benefits to employees injured or killed in a job-related accident. Some of the common scenarios for this coverage follow:

• Texas and Oklahoma allow an employer to opt out of the state's workers compensation law. Occupational accident insurance is an alternative way to fund the employer's obligation to the Independent Contractor.
• Some other states allow employers to assume part of the workers compensation risk themselves, subject to state approval. Occupational accident insurance can fund the assumed risk.
• Companies in the trucking industry use occupational accident insurance to provide benefits to owner-operators who are not employees.
• Most states have workers compensation waivers but they hide them in the small print.

An independent agent in the NTA network can help you find the right coverage for your firm. Contact an NTA agent today to get started.

Occupational Accident Statistics  

The International Labor Organization provides these worldwide statistics:

• 2.3 million people die each year from work-related accidents and injuries.
• There are 340 million work-related injuries each year.
• There are 160 million work-related illnesses each year.

Should You Get Occupational Accident Insurance?

A workers compensation policy automatically provides all the benefits mandated by a given state's workers compensation law. The policies offer little or no choice as to available coverage.

However, if you opt out of all, or part of, your state's workers compensation program, you assume liability for the same benefits you would have available to you under a workers compensation policy. Some very large employers have the financial resources to self insure against worker injuries, illnesses and fatalities. Most others will have to have protection against a large loss or series of losses.

Occupational accident insurance is normally divided into several areas:

• An amount available to pay medical benefits arising from a single accident
• Accidental death and dismemberment benefits, normally limited to a multiple of the employee's annual salary
• Disability benefits that will pay part of a disabled employee's salary for a certain period of time

Alternatively, the policy may have a combined single limit that will have one lump sum available to pay benefits in all three areas.

In any case, the policy will have a per-accident deductible and an annual maximum payable amount.

Finding the right program can be complicated. Work with an NTA agent who can give you the best program at the lowest cost. An independent NTA agent within the NTA network can help you.

Motor Carrier Benefits 

Occupational accident insurance makes benefits available to sole proprietors who are considered Independent Contractors and are not covered by workers compensation insurance.

If you run a trucking company, this coverage can be beneficial for several reasons:

• You will be able to offer benefits to your owner-operators for injuries they suffer on the job while under contract to you.
• You will have protection in the occasional case when, after an accident, an Independent Contractor tries to make a workers’ compensation claim against you if there are no other benefits available.
• Independent Contractors will be more likely to contract with you if this benefit is available.
• You will reduce the likelihood of having a lawsuit filed against you if Independent Contractors are able to get compensation for illnesses and injuries.
• Court cases have stated that having occupational accident coverage weighs in favor of Independent Contractor status as it can only be sold to sole proprietors.

Your Occupational Accident Insurance Options

Because benefits are not mandated by law, occupational accident insurance is more flexible than workers’ compensation. Your coverage choices include these options:

• Accidental death benefit
• Survivors benefit
• Accidental dismemberment
• Accident medical expense
• Temporary total disability
• Permanent total disability
• Non-occupational accident benefit
• Hernia and hemorrhoid benefit
• Chiropractic benefit
• Passenger accident benefit

Contingent Liability Coverage

A motor carrier can typically purchase contingent liability coverage only after they have an occupational accident insurance plan in place and meet the minimum number of trucks required. Contingent liability coverage can protect your trucking company should a driver initiate an action claiming to be an employee, rather than an independent contractor, and demanding workers compensation benefits. The policy will cover legal costs and, should the action be successful, will compensate you for benefit costs beyond those provided by the occupational accident policy up to the policy limits.

Sometimes the line between employee status and independent contractor status can become blurred. Laws governing this terminology can vary from state to state. If you are a trucking company owner mandating by contractual agreement that an occupational accident policy be in place, a contingent liability policy will give you an extra layer of protection.

If you wanted to really bury this subject of misclassification, you as a motor carrier must put enough nails in the coffin lid so that it does not come open. Just issuing a 1099 at the end of the year means absolutely nothing in today’s courts.

This is an issue to discuss with your attorney. A properly drawn independent contractor contract will help protect you against an employee status suit. But should you lose such a suit, you will be able to fall back on your contingent liability policy.

Get Your Occupational Accident Insurance Today!

Occupational accident insurance is complicated and has many different options. An improper choice could lead to a major financial loss for your company. That is why you need the help of a knowledgeable independent NTA agent.

An independent NTA agent can be an excellent resource when you have unique circumstances or need specialized insurance. These agents have access to many different insurance companies and can shop around for the best possible protection for your needs. 

A Professional Employer Organization (PEO) is an outsourcing company designed to assist small, medium and large size employers. The PEO takes on the administrative burden and allows the employer to concentrate on their business instead of payroll, workers' compensation and employment related tax burdens. A PEO traditionally has a high deductible workers' compensation policy that allows their clients to reap the benefits of being larger. In addition, this large deductible makes the PEO partially self-insured which permits them to accept a business risk that standard lines would traditionally decline.

Nearly any business can find value in a PEO relationship. An average PEO client is a business with 20 or more worksite employees. Larger businesses also find value in a PEO arrangement. A PEO includes many different types of employer groups ranging from construction trades like Roofing, Trucking, Steel Erection, Staffing and other hard to place industries in relation to standard insurance lines. Many professional employer groups such as doctors, retailers, hospitality, mechanics and engineers also benefit from a PEO arrangement.

Once you enter in to an agreement with a PEO, you are in a co-employment arrangement. In the arrangement, both the client company and the PEO have a relationship with the employee. They both share and allocate responsibilities and liabilities. The PEO assumes much of the responsibility for the business of employment such as payroll, employee tax compliance, and state unemployment claims. The employer retains responsibility for hiring/firing, product development and production, business operations, marketing, sales and service. Basically, it is like being with a payroll service that holds a master policy for workers' compensation and helps control risk. In addition, other services are available such as employee benefits and a human resource model when needed.

No. You retain ownership of the company and control its operations. With co-employment, you and the PEO will contractually share or allocate employer responsibilities and liabilities. The PEO generally only assumes responsibilities and liabilities associated with an employer for purposes of administration, payroll, taxes and benefits. You will continue to have responsibility for worksite safety and compliance. The PEO will be responsible for payroll and employment taxes and will maintain employee records. Because the PEO is responsible for workers' compensation, they will also focus on and improve safety and compliance. In general terms, the PEO will focus on employment related issues and you will be responsible for the actual business operations.

Business owners want to focus their time and energy on the "business of their business" and not on the "business of employment." As businesses grow, most owners do not have the necessary payroll and accounting skills, regulatory compliance knowledge, or a back ground in risk management. A PEO gives you access to benefits and employment amenities you would not have otherwise.

No need to pay more than the law should allow for workers' compensation coverage. This program will save your company premium dollars and at the same time build an insurance history that will aid in future offerings within standard lines of Insurance.

The PEO's economy of scale enables you to lower employment costs and increase your business' bottom line. You can maintain a simple in-house infrastructure or none at all relying on the PEO. The PEO provides critical assistance with employer compliance, which helps protect you against liability. In addition, the PEO provides time savings by handling routine and redundant tasks. This allows you to focus on the company's core competency and grow the bottom line.

The PEO assumes responsibility and liability for payment of wages and compliance with the rules and regulations governing the reporting and payment of federal and state wages paid to its employees. The PEO has established the role of reporting income and handling withholding, FICA and FUTA.

As the employer for employment tax, the PEO assumes responsibility and liability for payment of state unemployment taxes.

As employers, both you and the PEO have compliance obligations. The PEO provides worksite employees with coverage under many employment laws and regulations, including federal, state, and local discrimination laws.

The PEO is the employer of worksite employees for purposes of providing workers' compensation coverage.

The PEO delivers payrolls Monday - Friday, based on when you want it and what day you want it dated for. They process weekly, bi-weekly and semi-monthly payrolls.

When you decide to use a PEO, it is very simple. Call NTA and after qualifying your company's individual needs and you are completely comfortable, you will complete a PEO Service Agreement and each employee will complete an employee application, W-4, I-9 and your payroll will be set up based on your needs. You are now ready to go! The only responsibility you have is to report your hours to your PEO dedicated payroll contact. They will prepare your payroll with one total. Your payroll is then delivered and the PEO in turn will collect a check, wire or bank transfer. Pay as you go includes workers' compensation, payroll wages and taxes.