Occupational Accident Insurance
An Alternate Form Of Injury Insurance for Texas Employers
Texas Employers have an “opt-out” alternative, in lieu of Workers Compensation Insurance. It is called Occupational Accident Insurance and saves the employer approximately 30% in premiums when compared to traditional Workers Compensation. This insurance provides employers and their employees a high degree of protection should a work injury or accident occur.
Employers can choose the length of time for benefits, and create a plan specific to their business.
Key Differences between Work Comp and Occupational Accident Coverage
To be clear, Non-Subscription or Occupational Accident is not a substitute for Workers Compensation.
Workers Comp provides benefits for up to 70% of the average weekly wage, while Occupational Accident benefits are selected by the client.
Workers Comp is a no-fault insurance. The insurance policy will compensate employees for work related injuries regardless of fault. An Occupational Accident policy will not pay if the employee if deemed to be negligent or under the influence of a substance.
Occupational Accident policy has a pre-set limit of reimbursement for a specified period of time. Work Comp pays a percentage of the injured workers salary, and the benefit could be paid for a life time .
Occupational Accident insurance provides coverage for medical costs associated with the medical, disability payments for the injured workers while recovering from their injury, and scheduled benefit for accidental death and dismemberment. Occupational Accident plans are an approved ERISA plan. These policies provide defense and legal liability coverage for occupational injury claims.
It is important to understand the specific exclusions in Occupational Accident policies, as they are tailor made policies. PEO Texas provides clients with a clear understanding of what the policy covers.
In almost all instances, the inherent risk is employer legal liability. Traditional OA insurance programs exclude Employers Liability coverage for the employer, which provides defense coverage in the event the employee seeks legal recourse against the employer to recover damages caused by employer’s negligence. PEOs who offer Occupational Accident Insurance, will most likely have a separate component of coverage for Employer’s Liability in OA insurance coverage. The employment agreement will also include language to compel mediation and binding arbitration to limit legal expenses and excessive awards due to litigation.