Business owners have a legal obligation and ethical responsibility to provide their employees with a safe and healthy work environment. But despite their best efforts, accidents still happen in the workplace. As such, it’s important for employers to have certain insurance policies in place. T
his insurance acts as a failsafe to protect employers from the financial burden that comes with workplace incidents.
There are many types of insurance employers can purchase to protect their employees, but two of the most common are workers’ compensation and occupational accident insurance (OAI).
These insurances are quite similar, as they both provide benefits to workers who experience work-related injuries and illnesses. However, fundamentally, these two insurances are quite different, and in this article, we will explore these differences.
Coverage
One of the main differences between workers’ compensation and OAI is coverage. Workers’ compensation offers more comprehensive coverage. In contrast, occupational accident insurance offers more limited coverage.
Both worker’s compensation and occupational accident coverage offer similar coverage, but understanding your type of employee will determine which is right for you.
As such, it is best to contact a compensation attorney for workers in Houston for consultation on what best suits your needs.
Regulation
According to the U.S. Department of Labor’s Workers Compensation Program, each state and region has judicial regulation over the certain rules employers must follow.
As such, to make a claim for worker’s compensation insurance, it must be routed through the state workers’ compensation board.
Whereas the Occupational Safety and Health Administration (OSHA) oversees aspects related to the standards for occupational accident insurance. Additionally, individual states have agencies and regulations that oversee occupational accident insurance as well.
Benefits
Workers’ compensation offers more benefits to employees compared to occupational accident insurance. With the worker’s compensation, employees get to enjoy coverage on the:
- Medical expenses
- Lost wages
- Rehabilitation cost
- Death benefits.
On the other hand, occupational accident insurance excludes benefits for certain injuries and illnesses.
Moreover, occupational accident insurance is not a no-fault system. As such, if the employee in question is at fault for the injury or illness they sustained, they will not receive any benefit.
Eligibility
Workers compensation is a government-mandated program available to all employees. So, whether you are just starting your career, about to retire, or even a part-time employee, you are eligible for worker compensation coverage.
But the occupational accident insurance is geared toward independent contractors and owner-operators. OAI can be customized to meet the specific needs of businesses and employees.
Cost
The cost to have workers’ compensation coverage varies based on the annual payroll and the industry classification codes.
Also, claim history and the state where the company has an impact on the premium. Note that your employer covers the cost of this insurance. Whereas the cost of occupational accident insurance varies based on coverage options and the number of employees.
Also, the policy deductible, amount of coverage, and policy limit will impact the premium cost.
