While many state and federal laws require some form of injury liability protection for employees, the form of insurance coverage an employer should assume depends on the industry and the risks the company is willing to assume. In the area of employee injury and illness, employers can choose between a workers’ compensation insurance policy and occupational accident insurance.
Knowing the Coverage
Workers’ comp coverage gives employees medical benefits and wage replacement, but not all employees may be eligible to receive these benefits. Independent contracts aren’t generally eligible for workers’ comp, nor are part-time employees. Occupational accident coverage becomes a substitute, providing injury and accident coverage while a person is working. It doesn’t cost as much as a workers’ comp plan, nor it is a mandatory benefit required by law. For companies who want to save money and don’t have the need for a full workers’ comp plan, an occupational accident policy may be a strong substitute.
Through this insurance, a qualified employee may receive medical expenses, lost wages or death benefits under covered incidents to the limit of the policy. Businesses also have the flexibility to choose the limits, deductibles and the level of disability coverage they want to purchase. Occupational accident coverage provides very little, if any, coverage for legal expenses.
Making the Choice
Not all states allow occupational accident insurance to fulfill liability mandates. Speak to a broker about the legal requirements and determine which option minimizes both cost and risk.