Occupational accident insurance (OAI)

Occupational accident insurance provides financial protection for individuals, such as independent contractors and sole proprietors, who are not covered by traditional workers’ compensation. It typically covers expenses related to workplace injuries, including medical costs, lost wages, disability benefits, and death benefits.

Businesses and independent contractors across various industries rely on OAI, including:

• Truck drivers
• Construction workers
• Delivery drivers
• Gig economy workers
• Roofers and landscapers
• Healthcare workers
• Event staff

There are many ways individuals can be injured on the job. That includes slips and falls, overexertion from lifting, repetitive tasks, falling objects, exposure to harmful substances, hazardous machinery, and car accidents. For example, a roofer might fall from a ladder or get struck by debris. OAI provides crucial protection so injured workers can recover without the stress of medical bills or lost income.

Occupational accident coverage can prevent a workplace injury from turning into a devastating financial setback from medical expenses. Occupational accident insurance for independent contractors and others provides reimbursement for hospital stays, surgeries, and rehabilitation costs. These expenses are often financially overwhelming and can lead to bankruptcy without coverage.

OAI often includes disability benefits as well. Injured workers can receive a portion of their average weekly wage for a temporary disability, such as a broken bone, or for a permanent disability, such as dismemberment. This helps individuals and their families with living expenses while they recover and adapt to their situation.

Occupational accident insurance also provides death benefits in the event of an accidental death on the job. Financial support is provided to the worker’s family, which helps ease the burden during a difficult time. Coverage can be used for funeral expenses and other needs, so loved ones won't struggle financially as they cope with the challenges of losing a family member.

Is occupational accident insurance the same as workers’ comp? Workers' compensation and OAI both provide financial protection for workplace injuries, but there are important differences. For example, workers' compensation coverage is typically required by state law, while OAI is a voluntary insurance policy.

Another key difference is who the policies are designed for. Workers’ compensation is intended for businesses with employees, providing mandatory coverage for workplace injuries as required by state law. OAI offers benefits for work-related injuries to independent contractors and employees who are not covered by a workers’ compensation policy.

Employer's liability coverage is usually included with workers' compensation, but not with occupational accident insurance. This policy protects employers from legal costs stemming from workplace injuries.

Cost is another distinction. Workers' compensation premiums are typically higher due to mandated coverage requirements. Although OAI is generally more affordable, it usually doesn't provide the same level of coverage as workers' compensation.

Unlike workers' compensation, occupational accident insurance is typically not required by law. Although it is a voluntary coverage option, it’s important for many businesses to have as part of a comprehensive risk management strategy.

According to the National Safety Council (NSC), the costs of workplace injuries are significant. In 2022, the estimated total cost of workplace injuries was a staggering $167 billion. That includes an average of $1,040 per worker, $1.4 million per death, and $40,000 per medically consulted injury.

Occupational accident insurance not only provides coverage for certain liabilities, but it may also help businesses attract contractors and drivers by providing a sense of security. In the event of a workplace injury, workers will know they will receive a portion of their income while they are recovering, and their out-of-pocket medical expenses will be reduced.

An occupational accident policy is a good option for businesses that hire full-time and part-time gig workers, 1099 employees, and independent contractors. Obtaining OAI protects these workers in the event of a work-related accident, and some clients may require it in their contracts. Many businesses require anyone doing work for them to carry their own insurance policies to limit their liability if an accident occurs.

Businesses that often purchase OAI include the following:

OAI is particularly popular in the trucking industry and other transportation businesses. Occupational accident trucking insurance provides critical coverage for the risks independent owner operators face on the road and when loading and unloading cargo.

Occupational accident insurance for truckers and other motor carriers may also help to reduce the likelihood of employee injury lawsuits. In the event of a fall, back injury, or strain from loading and unloading cargo, employees can access essential benefits while they recover. This reduces the chance of disputes escalating into lawsuits.

Individuals who operate as sole proprietors or freelancers should also consider occupational accident insurance. These workers are often responsible for their own health and safety, and a serious accident could result in significant medical bills, loss of income, or the closure of their business.

Contact an Insureon agent to get a quote for occupational accident insurance, or to find out which type of insurance is right for your business. You can also fill out our easy online application to compare quotes for workers' comp and other policies from top-rated U.S. insurance companies. Once you find a policy that fits your needs, you can begin coverage in less than 24 hours.