Are Workers’ Compensation and Occupational Accident Insurance the Same?

Melinda Leathers | Mar 1, 2023 | minute read


Are Workers’ Compensation and Occupational Accident Insurance the Same?The short answer is no; they are two distinct kinds of insurance and risk tools which employers may use, depending on their situations.

One of the most important aspects of running a company is ensuring your employees are safe. That’s why businesses are required to have workers’ compensation and, in some cases, occupational accident insurance, which can help pay for medical costs related to work-related injuries or illnesses.

However, there’s a lot of confusion around these two types of insurance and what they mean for you as a business owner. In this article, we’ll explain how these policies work and why both are so crucial.

What Is Workers’ Compensation?

Workers’ compensation is an insurance product that provides statutory financial benefits to employees who have been injured in the course of their work duties. In the United States, workers’ compensation is managed by private insurers and state governments and covers employees of private business.

Free eBook: California Workers' Compensation Best Practices

Workers’ comp is not available to federal government workers or those employed by companies with fewer than four employees (unless they are working on a farm). This depends on state-specific laws.

It’s important to understand that workers’ compensation includes medical, death, rehabilitation, and wage-related benefits which are set by each state. Businesses are protected from civil litigation if employees are injured on the job.

Most states require employers to carry workers’ compensation insurance for their employees. There are some exceptions, though. For example, if you live in New Hampshire or Vermont and get hurt at work but do not have coverage through your employer or insurance company, then you may be able to seek benefits from the state instead.

Some states also allow individuals who are not employed by a company but still perform services related to it (for example independent contractors) access these same protections when injuries occur at the place where they do their work. But this is not always guaranteed.

What Is Occupational Accident Insurance?

Occupational accident insurance is a form of insurance that covers the costs of medical expenses, lost wages, and other related costs. It is important to note that occupational accident insurance is not the same thing as workers’ compensation.

For independent contractors and employees not covered by a workers’ compensation program, occupational accident insurance offers coverage similar to workers’ compensation insurance. The required level of insurance coverage is determined by the job type, the level of risk that can be accepted, and the state legislation.

Employees can purchase private plans on their own, and those policies are often cheaper than the ones offered through employers’ group plans. However, workers who do not have access to these voluntary options may still qualify for benefits if their injury meets certain criteria outlined by state law (for example: “injuries sustained while performing tasks required by the job”).

Workers’ Compensation vs. Occupational Accident Insurance

Workers’ Compensation vs. Occupational Accident Insurance

Workers’ Compensation

Occupational Accident Insurance

  • Benefits are subject to statutory rules and determined by state laws and rules.
These are determined before the policy is put in effect:
  • The limit of liability to carry per accident.
  • The deductible to assume per accident.
  • The level of disability coverage to provide.
  • The level of death benefit to provide



An insurance program’s implementation can be challenging. Work with a representative who can assist you in comparing alternatives and prices from different businesses to provide you with the best program at the lowest rate. An independent insurance agent can help achieve this.

There are some similarities between workers’ compensation and occupational accident insurance. Both are forms of insurance that provide financial support to people injured on the job. However, there are also key differences between these two types of coverage. It is important to understand how each one works so that you can choose the best option for your situation.

Free eBook: California Workers’ Compensation Best Practices

Free eBook | Central CA Workers' Compensation Best Practices | The Dos and Don'ts of Workers' Comp - Workers' comp can be as complex as it is costly, especially out here. Read Central CA Workers' Compensation Best Practices, to learn best practices and tips specifically for local businesses. Download

Leap | Carpenter | Kemps Insurance Agency Can Help

Contact the experts at Leap Carpenter Kemps Insurance Agency. We’ve been in business for over seven decades and have licensed experts on hand to guide you on the best coverage for your organization. Call for a free quote today!

Share This Blog

Like our content? Subscribe to Our Blog!


Related Articles

Liability risks can be a threat to your business, ...

Anytime you make a major business decision, it’s a...

A business owner’s worst nightmare is having to cl...

About The Author

I have cultivated relationships with my clients, which in some cases span over 20 years. I specialize in commercial insurance for agri-businesses and nonprofits. But if you have business insurance needs of any kind, I am open and excited to work alongside you. I look forward to watching your business grow.

Need more Specific Advice?

Tell us about your exposures, and we'll write an article about how we would mitigate your risk.