What You Need to Know About Occupational Hazard Insurance

Strong Tie Insurance March 27, 2020 StrongtieInsurance

The most valuable asset to any trucking company is the person behind the wheel. Without the brave men and women who handle the big rigs each day, the U.S. economy would be in shambles. With that in mind, it’s essential that our drivers are protected with the appropriate commercial truck insurance. From protecting an independent contractor to offering coverage for an entire team of drivers, there are cost-effective ways to ensure your business doesn’t lose its hardest-working asset.

Here’s what you need to know about occupational hazard insurance.

What is Occupational Hazard Trucking Insurance, and Why is it Needed?

Occupational hazard insurance is most easily defined as a policy that offers benefits to workers who aren’t covered under a workers’ compensation policy. A massive amount of trucking companies use independent contractors and owner-operators to make deliveries. Occupational hazard policies provide benefits to truckers who aren’t officially employees. Not only does this help protect the trucker, but this helps protect the trucking company. In some states, owner-operators can assert that they are wrongfully classified as independent contractors and file an injury claim against the company.

Some states also allow employers to opt-out of their state’s workers’ compensation programs. The employer still has the same legal obligation to employees who are injured on the job. Occupational hazard insurance programs are often more customizable and less expensive than their workers’ compensation counterparts.

According to the International Labor Organization, there are millions of work-related accidents each year.

  • There are over 340 million work-related injuries each year
  • 2.3 million people die from workplace injuries and accidents
  • Over 160 million workers suffer from work-related illnesses each year

There is no doubt that the trucking industry is full of risk. For the same reasons your company carries commercial trucking insurance, an occupational hazard policy is worth considering.

Workers’ Comp vs. Occupational Hazard Insurance

Workers’ Compensation is a state-regulated program that helps pay medical bills and helps replace some lost wages for employees who are injured on the job. The benefit of this program is that it’s run by the state government.

If an employee files a lawsuit, they have the burden of proof on their shoulders. Employees also can’t win judgments for pain, suffering, and other punitive damages outside of strict and rare situations. Ultimately, the overall liability is much lower for the employer.

The main downside of a workers’ compensation plan is that it costs much more than an occupational hazard policy. There is also no room for customization for companies with unique needs.

Occupational Hazard Insurance offers options. The coverage amount can change based on the employer’s perceived risk. That means that employers can choose their deductible and coverage amounts, but benefits are only paid up to the policy limits. This kind of program offers employers more control over what they offer their drivers as well as how much they pay for the policy.

The downside of using an occupational hazard insurance program along with your commercial trucking insurance package is that there is an increased liability for the employer. The company bears the burden of proof in a lawsuit, and employees can win punitive damages. If an employee’s expense exceeds the policy limits, the employee is responsible for the excess costs.

Are you adequately insured?

Strong Tie Insurance offers comprehensive commercial trucking insurance.

Is Occupational Hazard Insurance Right for My Company?

The decision on whether to purchase an occupational hazard insurance policy is not something you can take lightly. The first thing to consider comes in whether you use independent owner-operator truck drivers or hire employees. In the case of the latter, you may not have the option to replace workers’ compensation with an additional trucking insurance policy. You’ll want to check with your state’s laws to know if you have a choice.

If you’re like most of the trucking companies across the U.S., you work with owner-operators and independent contractors. In this case, it’s wise to offer them some kind of occupational hazard insurance. Some companies may be large enough and have the resources to self insure against workplace injuries. Most companies, however, would be devastated if hit with a hefty bill for an accident on the job.

There are some significant benefits to having an occupational hazard insurance policy in place at your company.

  • You can offer benefits to your owner-operators. This can help recruit better drivers and ultimately keep costs down in other areas.
  • You have protection in a situation where an owner-operator is injured. Not having an insurance policy in place could result in the driver filing a workers’ compensation claim or lawsuit against your company.
  • You’ll reduce the likelihood of lawsuits filed against you from workplace injuries.

Types of Hazard Insurance Options

Just as any commercial truck insurance policy, there are a variety of options. You can put together a package that is appropriate for the work that you do and customize your plan. These benefits are not legally mandated, so you can enjoy more flexibility overall. Here are some of the most common types of occupational hazard insurance:

  • 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

Companies that already have an occupational hazard insurance plan in place may also be interested in contingent liability insurance. This policy helps protect you in the case an owner-operator tries to claim workers’ compensation. A driver may argue that they are an employee instead of an independent contractor. Courts in different states are cracking down on the wrong classification of employees, so these kinds of claims could result in a messy legal battle.

Your contingent liability policy helps cover legal costs in these situations. If your company loses the case in court, contingent liability can also compensate you for benefit costs beyond what is provided in your occupational hazard insurance programs.

One way to ensure that there is no confusion nor opportunity for an owner-operator to claim employment, is to work with an attorney to create a solid owner-operator contract. This may not protect you from a suit taking place, but can cover legal fees if the issues move in that direction.

Protect Your Business by Protecting Your Employees

If you are interested in learning more about if an occupational hazard insurance policy is right for your business, call Strong Tie Insurance for a free consultation and quote. We can help you determine the right kind of commercial trucking and occupational hazard insurance policies for your company.