Occupational Accident Insurance: A Crucial Safety Net for Independent Contractors in Staffing

In the fast-paced world of temporary staffing, independent contractors play a vital role in meeting the flexible workforce needs of businesses. There is an increased demand from workers for flexibility in and control over their work schedule. Many workers prefer independent contractor status and are utilizing online staffing marketplaces for finding work.

Regardless of the method independent contractors are matched with their work, they face the same occupational hazards and potential accidents as W-2 employees while not qualifying for Workers’ Compensation benefits. Occupational Accident Insurance (OAI) has emerged as a crucial solution, providing independent contractors the coverage they need in the event of work-related accidents or injuries.

OAI is specifically tailored to meet the needs of independent contractors by providing coverage for a range of work-related incidents, including accidents, injuries, and occupational illness. The key components are:

Medical Expenses – OAI covers the costs associated with medical treatments, hospitalizations, surgeries, medications, and other healthcare services resulting from work-related accidents or injuries
Disability Benefits – In the unfortunate event of a disabling injury, OAI provides disability benefits that replace lost income. These benefits help independent contractors maintain financial stability during their recovery period, ensuring they can meet financial obligations while focusing on rehabilitation
Accidental Death and Dismemberment – OAI also provides financial support to contractors and their dependents in case of accidental death or permanent disability resulting from a work-related injury

If your staffing agency has a significant independent contractor worker base, offering OAI coverage to contractors has the following advantages:

Enhancing Contractor Attraction and Retention – Offering OAI coverage as part of the benefits package can make a business more appealing to contractors. It showcases a commitment to the independent contactor’s safety and financial security and may distinguish your agency from other similar companies. This, in turn, can help attract high quality candidates and improve retention rates.
Protecting the Workers’ Compensation Program – By providing OAI to independent contractors, businesses can mitigate the risk of contractors seeking coverage under the company’s Workers’ Compensation program. This helps preserve the stability and cost of the Workers’ Compensation program and ensures the Work Comp is only utilized by eligible employees.
Mitigating Financial Risk – Work-related accidents and injuries can lead to significant financial burden for independent contractors and staffing agencies alike. The protection can help cover costs and reduce potential litigation.

Occupational Accident Insurance is a vital tool for protecting workers and should be considered as the role of Independent Contactors continues to grow within the staffing industry.

There are important considerations in OAI program design, the interplay between Worker’s Compensation/Contingent Liability and how coverage is offered and paid for. Reach out to the ‘A’ Team today to learn more.

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ABOUT THE AUTHOR

Rachael Rodakowski

Rachael Rodakowski is a Vice President at Assurance who focuses on the staffing industry. Her main responsibility is to be a client’s resource and trusted partner. She accomplishes this by staying up-to-date on industry trends and providing cost-effective coverage recommendations. With over 10 years of experience, Rachael educates clients on everything from workers’ compensation class codes to loss trends. Rachael graduated with a Bachelor of Interdisciplinary Studies degree from Arizona State University. She currently holds her Chartered Property Casualty Underwriter (CPCU), Associate in Claims (AIC), Associate in Commercial Underwriting (AU) and Associate in General Insurance (AINS) designations.