November 14

Workers Compensation Vs. Occupational Accident Insurance


A good friend of mine who is a business owner once told me; “The world runs on liability.” Doing business in some states requires full time attention to risk mitigation on several different levels.

If you are like me and live in a state with a high (or unlimited) Workers’ Compensation ceiling, insuring yourself as an independent contractor can be extremely expensive. Likewise, hiring contractors can be tricky. As we all know, just because someone is not your employee doesn’t mean that a personal injury attorney, or worse the State or Federal Government, will not come knocking on your door looking for a settlement.   

While Workers’ Compensation offers a higher level of protection, it is often too expensive for independent and small businesses. Occupational Accident Insurance offers a cheaper alternative. And while the payout ceiling is lower, it is usually sufficient to cover costs related to injury.

While Occupation Accident Insurance is legal and sufficient in most cases, many States have taken the position that all workers should be covered by Workers’ Compensation Insurance. This leaves companies that use contractors in a conundrum.

Should we require Workers’ Compensation or roll the dice with a contractor that has Occupational Accident Insurance? Lucky for you, there are programs that deal with such issues. While these programs have been around for a while, requiring contractors to have insurance can be tricky for a few reasons.

  • Requiring insurance is deemed “control” by some State Agencies.
  • Ensuring that those policies are current can be a daunting task and require someone from your company to spend time and energy your company cannot afford.
  • With turnover and inconsistent workflow, the above increases exponentially.

So how do you mitigate your exposure? First, you need a solid contract. Secondly, you need to adhere to a “Best Practices” that is truly followed. And lastly, you need the support and knowledge from people that have the experience and expertise to help guide your company through the bureaucratic gauntlet.

The biggest question is: Does your business model meet the criteria of the government and the states that your company operates in?

For more information and guidance, go to or call 518-689-2470 x140

Are your contractors in need of insurance?

Do you need help processing settlement payments?

Do you want an extra layer of protection against the state and federal government?

Do you need a compliance review?

Are you looking to sell your company or acquire another?

Call us and we will be your One Stop Shop for all things Independent Contractor!


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