While most states require employers to carry workers’ compensation insurance for W-2 employees, owner operators and other independent contractors are typically exempt and do not receive the same coverage.
Instead, these workers rely on occupational accident insurance, which provides similar coverage for independent contractors.
Below is our complete guide to everything you need to know including what it covers, who needs it, how much it costs, and how it compares to workers’ compensation insurance.
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Occupational accident insurance provides coverage for lost wages, medical expenses, and death benefits for work-related injuries. It functions similarly to workers’ compensation insurance but is primarily used for independent contractors, such as owner operators in the trucking industry.
Trucking companies (as part of their lease contract) may require that owner operators purchase occupational accident coverage while other motor carriers may purchase the insurance for their independent contractors.
Occupational accident insurance is sometimes referred to as OCC insurance or OCC/ACC (“OCCupational ACCident”) insurance.
One example would be icy road conditions causing a truck driver to spin out of control by hitting a large patch of black ice and then veering into opposing traffic.
A less dangerous example would be an ergonomic injury such as back, leg, or arm pain from sitting for long periods while driving.
No, occupational accident insurance isn’t required by federal or state law, unlike workers’ compensation insurance.
With workers’ compensation, companies are required by law to pay lost wages and medical bills for employees that get injured on the job. However, when it comes to independent contractors, companies aren’t legally bound to pay for medical, disability, death, or dismemberment benefits. This can get complicated though, when independent contractors, who aren’t classified as employees, sue the trucking company when they suffer a job-related injury.
In some states, trucking companies can opt out of their state’s workers’ compensation insurance. However, they still have the same legal obligation to their employees if they suffer an injury or death on the job. Companies that opt out of workers’ compensation insurance often replace that coverage with an occupational accident insurance policy — so they can still fulfill this obligation but usually with lower costs.
Occupational accident coverage is mostly used for independent contractors but can also cover W-2 employees instead of a workers’ compensation policy when allowed by state law.
The Occupational Safety and Health Administration (OSHA) regulations govern the health and safety of workers and require that employers provide a safe workplace (e.g. warehouse, dock) where truckers go to deliver and pick up loads throughout the U.S. However, OSHA doesn’t regulate truckers who are self-employed or independent contractors, just the locations where they deliver and receive goods.
While occupational accident insurance coverage is not required by state law, whether or not it can be used instead of workers’ compensation insurance does vary from state to state.
For example, most Pennsylvania employers are required to carry workers’ compensation and cannot use OCC/ACC in place of workers’ compensation insurance to cover potential injuries or illnesses for their workers.
Texas, on the other hand, does not require employers to carry workers’ compensation insurance but employers that do not carry proper coverage can be open to personal injury lawsuits.
Anyone not covered by a workers’ compensation insurance policy will likely need OCC/ACC coverage.
These professions typically include:
In the trucking industry, flatbed drivers, tanker drivers, refrigerated freight drivers, freight haulers, LTL freight drivers, and local/regional/OTR drivers all need coverage.
Some motor carriers require their owner operators to pay for their OCC/ACC coverage in their lease agreement while other carriers provide coverage as a benefit.
Trucking companies that require independent contractors to pay for their owner OCC/ACC insurance may still provide a group policy for better rates but owner operators can also purchase a separate policy on their own.
Occupational accident insurance typically covers medical, disability, death or dismemberment, and survivor coverage stemming from a work-related incident.
Some policies will also cover non-occupational incidents but they are less common.
Occupational accident insurance doesn’t cover accidents or injuries off the job (unless the plan specifically offers non-occupational coverage), legal expenses, or individuals covered by workers’ compensation. Nor does it cover injuries related to substance use (e.g. intoxication), suicide or self-inflicted injuries, and assault or physical violence.
Coverage may be more difficult to obtain for dangerous positions, such as truckers hauling hazardous material.
Occupational accident insurance typically has a policy limit between $500k and $1M per incident.
Specific benefits, such as accidental death and dismemberment, may have specific sub limits, which cap the amount the insurance carrier will pay out on claims.
Similarly, disability payments will usually only cover a portion of a driver’s basic earnings, regardless of the policy limit.
Occupational accident insurance typically costs anywhere from $50 to $200 per worker per month, depending on the coverage.
Costs will fluctuate depending on the provider, deductible, limits, individuals on the policy, risks, benefits, payout, and claims history.
Yes, premiums from occupational accident coverage may be deducted as a business expense.
Occupational accident insurance is for 1099 truck drivers, typically in the form of owner operators that are leased onto a motor carrier or operating under their own authority.
The insurance is private and covers medical expenses, disability, death, and dismemberment benefits. Employers have the flexibility to choose their insurance plan (coverage amount and the deductible) if they choose to offer a group policy. Employers can also require independent contractors to purchase coverage on their own.
Workers’ compensation insurance, on the other hand, is a state-administered insurance program that provides payments for medical expenses, lost wages, and rehabilitation services to employees (company drivers who are considered W-2 employees) who suffer an injury, disability, or death due to their job. Workers’ compensation insurance typically doesn’t cover 1099 truck drivers.
Most states require businesses to pay for workers’ compensation for their employees. Since this type of coverage is state-administered, they determine the benefits and wages provided.
Employers should educate themselves about whether their workers are technically considered W-2 or 1099 drivers by taking into account their employment practices, the types of risks they assume, and their individual state’s laws and policies. If a worker is misclassified as an independent contractor when they should be classified as a W-2 employee, employers can run into legal and liability issues.
Truckers’ occupational insurance isn’t the same as workers’ compensation insurance. While both cover job-related injuries or death, truckers’ occupational insurance is typically for independent contractors while workers’ compensation coverage is typically required for employee drivers.
Primary differences include:
Unlike OCC/ACC insurance, workers’ compensation is state-regulated and each state has different laws surrounding the limits and qualifying factors.
While some states allow employers to use OCC/ACC instead of workers’ compensation insurance, most states do not allow employers to use it in place of workman's comp.
Employers should check their state labor laws or speak with an insurance agent before making a purchase.
Contingent liability insurance provides additional protection to OCC/ACC by covering legal expenses when independent contractors claim they were misclassified and are demanding workers' compensation benefits.
Contingent liability can typically only be purchased after having an OCC/ACC plan in place.
An insurance broker doesn’t carry contractual obligations with any insurance provider so they can contact multiple insurance companies to find the best policy for their client.
Other facts about brokers:
An insurance carrier is a company that sells insurance directly to consumers. Insurance carriers are the ones that insure you, receive your monthly premiums, and pay claims after a loss.
Other facts about insurance carriers:
OCC/ACC can be bought by an individual truck driver or by the motor carrier as a group policy.
Some employers offering a group policy will ask their workers to purchase occupational accident coverage as part of their working agreement and they deduct the cost of the coverage from the workers’ paychecks. Other carriers will pay the premiums on their group policy.
Owner operators can also purchase coverage on their own as an individual policy.
In addition to OCC insurance, motor carriers will typically need:
Owner operators on the other hand will typically need:
Zurich has offered OCC/ACC insurance to truckers for over 20 years. In addition to the standard coverage options, Zurich also offers truck payment coverage for injured drivers and will retrain them if they are unable to return to work. NAIC reports an extremely low complaint ratio for their occupational accident policies and owner operators can look to Zurich for the other insurance plans they need such as physical damage and non-trucking liability. Potential customers will need to work with a broker to purchase coverage.
OOIDA sponsors occupational accident plans for their members that provide coverage for accidental medical, accidental dental, disability income, and accidental death and dismemberment. Policy limits can either be $500K, $1M, or $2M and they offer limited medical, dental, and death benefits for non-occupational incidents. NAIC reports that the company has extremely low complaint ratios for its OCC/ACC policies.
Great American offers flexible policies with a wide range of limits and even offers non-occupational coverage depending on the plan. Owner operators can also rely on Great American for their other insurance needs. The company has been rated A+ by AM Best and does not have any complaints reported by NAIC. Truckers will need to work with an agent to purchase a policy.
Founded in 1882, Chubb has received an A++ financial rating by AM Best and received no NAIC complaints for their OCC/ACC insurance. Truckers can choose combined policy limits between $100k and $500k per incident. Policies need to be purchased through an agent. Like the other top companies, owner operators can also purchase commercial truck insurance from Chubb along with other coverage.
Formerly known as OneBeacon Insurance, Intact Insurance was founded in 2001 and offers a wide variety of insurance programs across industries. While the company has received an A+ rating from AM Best, the company has a poor reputation online from user reviews. Their website does not disclose much information about their coverage options and potential policyholders will need to work with a broker to buy coverage.
No, Progressive does not offer occupational accident insurance. However, they do offer other types of insurance for trucking companies such as commercial truck insurance, motor truck cargo, non-trucking liability, and workers’ compensation coverage.
OCC stands for occupational accident insurance. It is also sometimes abbreviated as OCC/ACC.
Non-occupational coverage provides benefits for non-work-related injuries.
Injured truckers can apply for disability while through OCC/ACC. If a trucker is unable to work, most policies will cover temporary total disability benefits in addition to state-issued disability.
Experience modification rate, or EMR, is a statistic used by insurance companies to predict how risky a business is to insure for workers’ compensation. An EMR of 1.0 is average; below 1.0 is good; above 1.0 is risky. EMR is calculated based on a number of factors, including the number of previous claims. EMR applies only to workers’ compensation and not OCC/ACC. However, insurance companies will use other metrics (such as driving experience) when calculating OCC insurance premiums.
In 2020, 4,842 large trucks were involved in fatal crashes and 45,900 large trucks were involved in crashes resulting in one or more injuries, according to the Motor Carrier Management Information System (MCMIS).