As a Compliance Manager it's important to ensure your organization is protected in addition to ensuring your contingent workforce is protected. Bunker's Occupational Accident insurance is our solution for workers' compensation for the contingent workforce. Worker’s Compensation laws only provide coverage for employees. Independent contractors are not expressly covered under Worker’s Compensation laws, but in certain situations can establish an employer/employee relationship. Read on below to better understand what this type of insurance is and what circumstances your workforce is covered.
What could happen if I hire or place an independent contractor who is injured while performing the job?
If an independent contractor is injured while working and can provide evidence of an employer/employee relationship, then they will be entitled to file a worker’s compensation claim against the company that contracted them. If the employer does not have worker’s compensation coverage in force then the employer would be subject to paying for the injuries, lost wages, legal defense costs, plus potentially state imposed fines and penalties. Even if the employer does have worker’s compensation coverage in force, their premium does not account for independent contractor payroll, so they could face higher premium rates and potentially non-renewal of their worker’s compensation insurance policy.
My company and our vendors use Independent Contractors. How should we protect ourselves?
Many companies require independent contractors to purchase worker’s compensation policies in their own name. This creates a large additional expense for the independent contractor that must be passed on to the contracting company. In certain states, it also leaves open the possibility for the independent contractor’s worker’s compensation insurance carrier to subrogate against the employer’s own worker’s compensation insurance.
Is there an alternative solution?
Occupational accident insurance provides indemnity for injury or death of the independent contractor resulting from on-the-job injuries, at a lower premium than worker’s compensation insurance.
What’s the risk of injury?
The frequency and severity of injury varies across industries, but in 2015 the Bureau of Labor Statistics reported 2.9 million nonfatal workplace injuries and illnesses at private sector employers. This