An Alternative to Workers Compensation for Gig Workers
A recent post by Vincent Capaldi, president of Bay Oaks Wholesale Brokerage in the LinkedIn group Workers Compensation Roundtable sparked a discussion of occupational accident insurance. The NLRB general counsel has opined that Uber drivers are contractors not employees. Although some states have taken the opposite position, gig workers do run the risk of no coverage for work injuries (for drivers, this would include automobile accidents if their Personal Auto medical benefits exclude business use).
For workers who do not qualify as employees, occupational accident insurance has been used for a long time. It is common in the transportation industry but can cover other types of contract labor. It covers medical benefits, qualified expenses and disability for on the job injuries. Unlike workers compensation which covers benefits required by state law, occupational accident insurance has policy limits and excludes certain types of worker.
Although coverage can be offered on a voluntary basis, accident insurance works best when it is a condition of employment. This protects the company since workers who cannot prove they are insured will be charged as employees on the company’s workers compensation policy. Injured workers with insurance are less likely to sue the company since they have coverage. If payment is an issue, “pay as you go” policies are a possible solution.
Companies which hire independent contractors or gig workers on a regular basis should insist on evidence of either workers compensation or accident insurance from them.