It is a stressful time for any business when an employee is injured on the job. In smaller or newly-formed companies, management may be uncertain how to prepare for legal and financial obligations when it occurs. Here is an explanation of occupational accident policy vs. workers’ compensation in dealing with these situations.

Workers’ Compensation

Workers’ compensation is a type of insurance policy that most states require businesses to purchase. It protects employers by covering the cost of legal defense if the worker sues for damages. It also protects injured workers by paying for the following expenses:

  • Emergency medical bills 
  • Costs of ongoing treatments
  • Disability benefits
  • Lost wages
  • Benefits to surviving family members should the person die

Occupational Accident Insurance

In states where employers can opt out of workers’ compensation, some choose occupational accident insurance to fulfill their financial obligations to injured workers. Others use it to offer benefits to the following types of employees who workers’ compensation does not cover:

  • Volunteers
  • Contractors
  • Railroad employees
  • Longshoremen

Occupational accident insurance is the less expensive option for managing financial risks associated with employee injuries; however, because it does not cover legal fees, it is also the riskiest. Talk with your insurance agent about which type of employee accident policy is right for your business.