If a trucking company is looking for more affordable alternatives to workers’ compensation insurance, they might decide to purchase occupational accident coverage for non-employee truckers. This is because workers’ compensation coverage used to be relatively expensive for businesses.
Typically, motor carriers allow owners of trucking businesses to provide either workers’ compensation or occupational accident coverage, regardless of employment status. However, many companies don’t purchase workers’ compensation for subcontracted drivers in order to cut costs.
Generally speaking, occupational accident insurance provides less coverage than workers’ compensation. Workers’ compensation is only reserved for employees and truck drivers of a company, providing coverage to those who get injured or sick from a work-related incident. However, occupational accident insurance can provide more benefits than health insurance.
Despite this, it is a legal requirement in several states to invest in workers’ compensation, even if workers are perceived as independent contractors to a trucking company. For instance, California rules and regulations define both company drivers and non-employee truckers as being employees.
In the event that an independent trucker suffers an accident, the carrier might have to pay for claims out of pocket if they didn’t purchase workers’ compensation coverage. In addition, it is likely that a court could also rule that the contractor should have been classified as an employee and charge additional fines to the trucking business.
Because of this, trucking companies need to carefully check the rules and regulations of the state or states that they operate in. Purchasing workers’ compensation for all their employees, whether contractual or full-time, can prevent additional expenses down the line.
Learn more about the importance of general liability insurance trucking coverage at Assured Standard!