Most of you with W-2 employees carry Workers Compensation coverage. Since the vast majority of the courier industry utilizes independent contractors (IC’s) as drivers, the employees usually are Administrative/Clerical, Dispatch and Sales People. If you do utilize IC’s, many of you rely solely on your written IC Agreement to get you off the hook if an IC is injured and attempts to file a claim under Workers Compensation. A number of states also expressly exclude IC’s from Workers Compensation laws, giving many of you further reason to ignore driver occupational injury. Let’s assume you do have a Workers Compensation policy and an IC gets injured and comes after you as employee claim. The good news is that your Workers Comp insurance carrier will have to step up to defend you the claim if the driver is successful. The bad news is that the carrier, not real happy about paying a claim on a driver, having gotten classification, may very well come back to you demanding premium on all IC drivers – and they can legally go back three years! Today, perhaps the more fundamental problem is getting a carrier to write Workers Comp at all for clerical, administrative and sales personnel while not getting premium for drivers. Essentially there are three methods of dealing with the problem:
1.) You can purchase Workers Comp and include drivers (utilizing the rule -their remuneration), and then charge the drivers for it.
2.) You can purchase an Occupational/Accident Contingent Liability program from us to cover your drivers. Then we can direct you to another broker that has a Workers Compensation program set up with a major national insurance carrier that will write the non-hazardous payroll classes of a courier operation (clerical/administrative/sales). They acknowledge the Occ/Acc Contingent coverage the IC drivers carry and will not try to go after driver premium on an audit.
3.) You can sign up with one of the major IC management companies such as SCI, NICA, or CMS. We can provide contact names and phone numbers. They contract with the drivers, establishing them as independent businesses, then they contract with you to your operation.
Written by: Jeffery Ice, Oswald Logistic Insurance, February 2006