Occupational Accident Insurance for Truckers - What’s Covered?

Occupational accident insurance for truckers  provides an opportunity in a niche market targeting 1099 truck drivers. The owner-operator might be working under assignment for a motor carrier or operating under their own authority with the need for private insurance. Here we look at the unique intricacies of this type of insurance, the customers who need it, and what’s covered by occupational accident insurance.  

What is Occupational Accident Insurance?

Occupational accident insurance, also known as OCC or OCC/ACC, covers lost wages, medical expenses,death and dismemberment  benefits for independent contractors who have suffered work-related injuries while under dispatch. This makes it perfect for owner-operators in the trucking industry who want to either appeal to carriers that require specialty transportation insurance coverage for their lease contract drivers or to insure themselves in the case of accidents.  Most carrier companies purchase occupational accident, at discounted rates, for their independent contractors as an incentive to attract more drivers.

‍What is Included in Occupational Accident Insurance for Truckers?

Occupational accident insurance typically covers the following as a result of work-related accidents and injuries:

• Medical
• Disability (lost wages)
• Rehabilitation
• Death or dismemberment
• Survivor coverage

Lawsuits and legal expenses for job related injuries unless there is supplemental contingent liability coverage. Some of the policy exclusions are:

• Injuries caused by accidents while under the influence of substances
• Assault or physical violence
• Suicide
• Self-inflicted injuries

Truckers who haul hazardous materials are more likely to encounter challenges when applying for occupational accident insurance through their insurance retailer. In this case, a special insurance product is required, offering an opportunity for insurance retailers to cater to hard-to-insure clients.

Who is the Target Audience for Occupational Accident Insurance?

There are typically three targets for occupational accident insurance for truckers:

1. Owner-operators: Owner-operators operate under their own authority and can legally transport freight and haul containers. They typically operate with a single vehicle or two, driven by themselves.
2. Independent contractors: Independent contractors do not have their own authority and, therefore, must work through companies that contract drivers looking to carry freight under a company’s authority.
3. Small fleet owners: Small fleet owners have a fleet of five trucks or less and hire drivers to operate their vehicles.

Occupational Accident Insurance versus Workers' Compensation

Workers' compensation insurance is a state-administered insurance program providing coverage for medical expenses, lost wages, and rehabilitation services for drivers employed by companies considered W-2 employees. Most states require this coverage, which typically does not include 1099 truck drivers. 

Employers pay for workers' compensation insurance based on a percentage of their payroll. Occupational accident insurance for truckers, on the other hand, is not a requirement and is designed for 1099 truck drivers not covered by workers’ compensation. They pay for their premiums and can decide how much coverage they feel is appropriate for their needs.

State Availability

There are some states that allow trucking companies to cover their workers’ compensation obligations through occupational accident insurance for truckers. For example, Texas is more flexible as long as the company offers equal compensation to what it would receive based on workers’ compensation requirements. It’s important to understand local state laws to understand what targets are viable and where OCC is considered a legitimate option for workers’ compensation.

Cost Factors for Occupational Accident Insurance

Cost factors for occupational accident insurance policies for truckers have specific considerations but still adhere to the same basic risk factors as any type of insurance. This includes:

• Age and health of the driver
• Higher deductibles and lower coverage limitations help to reduce premiums
• Driving history and experience with emphasis on frequency of accidents, licenses, training upgrades, etc.
• Type of trucking operations such as the type of materials hauled, the routes traveled, etc.

Considerations for Retail Agents

Insurance retail agents selling occupational accident insurance need to understand their client needs and risk profiles. For example, a 1099 driver with five years of experience who delivers baby supplies to a retailer on relatively short hauls is easier to insure than an independent contractor with 20 years of experience who delivers hazardous chemicals on longer hauls. All the risk factors contribute to the amount of coverage recommended and help ensure each driver has enough coverage without overpaying for premiums.

Also, specialized insurers will have the greatest reach and capability to increase sales and stimulate growth in this niche market. Tailoring coverage options to meet client requirements is always a given, with the need for thorough reviews of experience, accidents, training, and an understanding of the routes traveled and materials carried by the driver.

Finally, ensuring that motor carriers providing occupational accident insurance for 1099 drivers and contractors have a comprehensive contingent liability coverage is crucial.  This will protect the owner when leased/contracted drivers are injured and try to claim they are W-2 employees covered by Workers' Compensation. 

OCC ACC with Novatae

Occupational accident insurance for truckers offers an opportunity to target this growing niche market. Both owner-operators and independent contractors require coverage for injuries as well as compensation for their families in the case of death or dismemberment. With a keen understanding of what this particular type of insurance offers, we encourage insurers to consider the inclusion of this type of insurance in their offerings. 

It is especially important for 1099 drivers who have no coverage whatsoever through motor carriers when operating under their own authority. Contracted drivers are faced with daily financial risks should the unthinkable occur. With proper insurance coverage, they can access the funding they need to recover from their injuries and return to work as soon as possible.

If you are a broker or insurance retailer interested in expanding your insurance offering, Novatae is a wholesale insurer specializing in placing insurance coverage for unique, complex, or hard-to-place risks. For more information on our occupational accident insurance services, reach out to our team of specialty insurance experts today.

This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.