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Occupational Accident vs. Workers' Comp in Trucking

OCC/ACC cover wage loss benefits

The trucking industry presents unique risks for both truck drivers and companies. When accidents occur, understanding the difference between Occupational Accident Insurance (OCC/ACC) vs Workers’ Comp is crucial for understanding the claims process and securing proper financial protection.

A work-related injury

What is Occupational Accident Insurance?

Occupational accident insurance is a private insurance policy designed to provide financial benefits to independent contractors who are involved in a work-related accident.

Unlike workers’ comp, which is mandatory for employees, occupational accident insurance is optional for both the independent contractor and trucking companies. Companies that employ contractors in a high perceived risk industries like trucking may benefit greatly from OCC/ACC.

Key benefits of occupational accident coverage can include:​

  • Medical expense coverage: Covers costs associated with treating work-related injuries.
  • Lost wage replacement: Covered independent contractors are provided with financial support while the contractor recovers and cannot work.
  • Accidental death benefits: Offers financial assistance to the contractor’s family in case of a work-related fatality.

What is Workers' Compensation Insurance?

Workers’ compensation insurance is a state-mandated insurance program that provides financial benefits to employees who are injured on the job.

It covers medical expenses from work-related injury, lost wages, dismemberment benefits, and potentially vocational rehabilitation or disability benefits.

A trucker on a wheelchair

Key benefits of workers' compensation insurance include:

  • Guaranteed coverage: All employees are entitled to workers’ compensation benefits, regardless of fault.
  • No-fault system: Employees receive benefits regardless of who caused the accident.
  • Includes employer liability coverage: Covers legal defense costs and potential settlements if an employee sues their employer for a work-related injury or illness, even if the claim falls outside the scope of traditional WC benefits.
    • In some states (North Dakota, Ohio, Washington, and Wyoming), workers compensation does not include employer liability coverage.
  • Comprehensive coverage: Covers a wider range of injuries and expenses compared to OCC/ACC.
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Occupational Accident Insurance vs Workers' Compensation: A Breakdown

Comparing insurance options in the trucking industry can be challenging, especially when it comes to understanding workers’ compensation and occupational accident insurance.

Here’s a breakdown of their key differences through different categories:

Coverage Type

  • Occupational Accident Insurance: Private insurance policy purchased by companies or contractors themselves.
  • Workers’ Compensation: State-mandated insurance program funded by employers.

Cost

  • OCC/ACC: Generally lower than workers’ compensation, but can vary depending on risk factors and occupational accident policy details.
  • Workers’ Compensation: Varies by state and industry, often higher than OCC/ACC due to its comprehensive coverage and mandatory nature.

Who is Covered

  • OCC/ACC: Independent contractors only. They are considered self-employed individuals who perform work for a company but are not considered employees. They control their work schedules, tools, and methods, and receive payment through invoices rather than paychecks.
  • Workers’ Compensation: One or more employees. Employees are individuals who work for a company under their direction and control. They receive regular wages, benefits, and are subject to company policies and supervision.

Coverage Scope

  • OCC/ACC: Independent contractors only. They are considered self-employed individuals who perform work for a company but are not considered employees. They control their work schedules, tools, and methods, and receive payment through invoices rather than paychecks.
  • Workers’ Compensation: One or more employees. Employees are individuals who work for a company under their direction and control. They receive regular wages, benefits, and are subject to company policies and supervision.

Coverage Scope

  • Occupational Accident coverage: Varies by policy, often covering medical expenses, cover wage loss benefits, and death benefits. May exclude certain workplace injuries or have coverage limits.
  • Workers’ Compensation coverage: More comprehensive coverage for most work-related injuries, including medical treatment, wage loss benefits, vocational rehabilitation, and disability benefits.

Claim Process

  • Occupational Accident claim: May be more complex and less standardized than workers’ comp, with procedures varying by insurance carrier.
  • Workers’ Compensation claim: Established process with clear guidelines set by each state. Often involves filing claims with the state agency or insurance carrier.

Additional Considerations

  • Occupational Accident Insurance: May be a good option for companies with a high number of contractors, but employers should carefully review policy details and ensure coverage adequacy.
  • Workers’ Compensation: Essential for all companies with employees to comply with state regulations and protect themselves from potential lawsuits.

What is the Composite Rate for Workers' Comp?

The composite rate is a single rate used to calculate the premium for workers’ comp insurance. It is based on a combination of factors, including:

  • Industry classification: Different industries have different risk profiles, leading to varying rates.
  • Experience modification factor (EMR): This reflects a company’s past claims history, with a lower EMR leading to lower premiums.
  • State-specific factors: Each state has its own regulations and rates for workers’ comp.

How to Calculate Composite Rate for Workers' Compensation

Calculating the composite rate involves multiplying the industry rate by the EMR and then adding any state-specific surcharges or discounts. This process is typically handled by insurance companies.

Here’s the formula to compute for the composite rate:

Composite Rate = Experience Rate + Manual Rate + Assigned Risk Pool Surcharge (if applicable)

Where:

  • Experience Rate: Based on an employer’s past claims history. Good safety records lead to lower rates.
  • Manual Rate: Set by the state based on the inherent risks of the industry.
  • Assigned Risk Pool Surcharge: Applies to employers unable to secure coverage in the standard market.

Where to Get Workers' Comp and OCC/ACC for Owner-Operators and Motor Carriers

In today’s insurance landscape, merely purchasing workers compensation and occupational accident policies is no longer enough. This is where our revolutionary offering, the Premium Control Plan (PCP), steps in to transform your insurance experience. Designed to outshine traditional, passive approaches, PCP is not just a plan; it’s a commitment to proactive premium management.

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Premium Control Plan (PCP)

Ready to transition from passive policy management to proactive premium control? Contact us today to learn more about the Premium Control Plan and take the first step towards smarter, more efficient insurance management. Fill out our quote form or reach out directly, and let us show you how PCP can redefine your insurance experience.

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