Workers’ Compensation For The On-Demand Worker

How To Effectively Protect Everyone In The Growing Talent Supply Chain

One of the common questions we hear at Bunker from enterprise, staffing, and on-demand platform clients is - ‘How do we solve for the worker injury / Workers’ Compensation problem when engaging independent contractors’?  It’s a hot button topic that has tangible risk, particularly in light of the lawsuits we’ve continued to see emerge on the issue.  If you’re not asking this question already and putting a solution in place, you should be.  

The answer is complicated, not one-size fits all, and while insurance hasn’t fully kept up with the pace of change relating to contingent work, progressive insurers have both increased and evolved significantly over the past 12 months to close the gap.  We’ve been working with those insurers over the past year to develop better products - from General and Professional Liability to Workers’ Compensation and Commercial Auto - and it’s exciting to see on-demand and contingent workforce insurance solutions continue to improve.  If you want to hear a detailed update on our insurance products and partnerships for independent professionals and the staffing ecosystem, feel free to reach out (hello@buildbunker.com or 866-420-0124).

Specific to Workers’ Compensation, there are many facets to be considered - protecting workers against injury, helping those workers who are injured on the job, and helping enterprises that engage independent workers against injury related litigation.  

Since we hear the question quite a bit and it’s a fluid topic, we thought we’d create a brief Independent Contractor Worker Protection FAQ.  

 

How does insurance impact independent professionals and worker classification?

  • Before you start with the insurance question, make sure your IC vetting, compliance, and contracting processes are in order.  As an example, each of your contracts; supplier, provider, and overall T&C should have clear insurance & indemnity provisions - reviewed by counsel.  This is one of the first items insurance underwriters will review, and arguably even more important than insurance as proper classification is the primary line of defense. 

What is Workers’ Compensation Insurance?

  • ‘Work comp’ is statutory coverage historically designed for W2 employees - and regulations vary from one state to the next.  Its structure is focused more on ‘return to work’ type benefits that are consistent in employer/employee relationships.  Although policies can be structured to include independent contractors, the coverage and benefits on a standard form don’t lend themselves perfectly to most independent contractor arrangements.  There is also potential confusion in matters of IC/employee classification, if not properly understood and structured correctly. Bunker is working with top insurance companies that understand these important distinctions.

Can an Independent Contractor purchase their own Workers’ Compensation policy?

  • Individual Workers’ Compensation policies for sole proprietors and independent contractors are available.  It varies by state and type of service, but we’ve placed these for clients and prices range between $350 to $1,200 annually for most types of independent contractors. As a general rule, however, sole proprietor IC’s, are not required by statute to secure workers’ compensation.

What is Occupational Accident and Contingent Liability insurance?

  • The trucking industry solved the problem of IC on-the-job injuries decades ago through Occupational Accident insurance and Contingent Liability.  Occupational Accident insurance provides certain benefits to the worker in the event of injury. Contingent Liability protects the enterprise against potential employee/IC classification issues - in a way similar to Workers’ Compensation, but at much less cost.  Some of the more progressive insurers we work with have put solutions together for our clients outside of  the trucking industry.

What are the new Future of Work solutions?

  • Unique, usage-based, solutions utilizing customized Workers’ Compensation coverage and/or Occupational Accident & Contingent Liability insurance are becoming increasingly available and emerging every month.  There is real change happening, and Bunker is proud to be at the forefront.  We’ve been procuring customized, affordable solutions for clients today that wouldn’t have been available even just a few months ago.  

 

Just as the staffing industry is evolving for the Future of Work, the insurance industry is as well.  If you’re interested in learning more about new and innovative options available to protect your company against independent contractor injury-related litigation and your independent workers against injury, reach out to Bunker (hello@buildbunker.com or 866-420-0124) for a free assessment and detailed update on our Workers’ Compensation products and partnerships.