Occupational Accident Insurance Is Not a Substitute for Workers’ Compensation in North Carolina

OAI is not workers' compensation.There are two primary types of insurance available to employees in North Carolina: workers’ compensation insurance and occupational accident insurance (OAI). 

While they may sound similar on the surface, there are important distinctions between the two. Unlike workers’ compensation insurance, OAI coverage pays limited benefits. Let’s take a closer look at how these two types of workplace insurance differ.

Occupational Accident Insurance

Occupational accident insurance (OAI) is coverage your employer may choose to purchase. The deductible, limits, and disability coverage that come along with OAI are up to the business purchasing the policy. OAI is most often used to cover independent contractors who would not be eligible for workers’ compensation. It originated in the trucking industry.

OAI covers the following:

  • Wages lost as a result of the injury
  • Cost of medical treatment
  • Death benefits (if the injury was fatal)

OAI typically costs less than workers’ compensation coverage, which can make it attractive to some employers. However, OAI offers little coverage by way of legal expenses if an employer is sued.

With OAI, the burden of proof lies with the employer rather than the employee, further increasing the risk to the employer. If the injured employee’s expenses for medical treatment and lost wages exceed the plan’s coverage limits, the employer is responsible for covering the remaining costs.

OAI is not a lawful substitute for workers’ compensation coverage in the state of North Carolina.

Workers’ Compensation

North Carolina law requires that all businesses that regularly employ three or more people obtain workers’ compensation insurance. Workers' compensation in North Carolina is not optional for employers. Business owners who don’t purchase workers’ compensation insurance face financial penalties and imprisonment. Employers can still be held liable to pay all medical expenses and lost wages for injured employees. 

Unlike with lawsuits that occur with OAI claims, the burden of proof with workers’ compensation lies with the worker rather than the employer. The injured party has to prove that what happened at work is the cause of their condition. 

Since coverage provides ample protection, it is less likely that a business will face a lawsuit. If there is a lawsuit, workers’ compensation allows for a paid defense—unlike OAI. 

Most injuries that occur on the job are covered by workers’ compensation insurance in North Carolina, including accidents and illnesses that are caused by exposure to job activities, materials, and equipment. Common workers’ comp accidents in North Carolina include slip and falls, vehicle accidents, machine accidents, and load handling accidents.

Workers’ compensation covers your medical expenses and a portion of your lost wages. It generally doesn’t cover the following:

  • Compensation for pain and suffering or punitive damages
  • Self-inflicted injuries
  • Injuries that occurred while a crime was being committed or while violating company policies
  • Stress or other psychiatric disorders
  • Injuries caused by fighting or horseplay
  • Injuries that happen when commuting to and from work
  • Injuries that occurred because you were under the influence of alcohol or drugs

Making a Workers’ Compensation Claim

Injuries that happen on the job should be reported immediately. In North Carolina, you have 30 days to report the incident and collect benefits. Another consideration with any delay in filing is that it might give the impression to the insurance carrier that neither the injury nor the claim is legitimate.

Although you do not need to hire an attorney to file a workers’ compensation claim, an experienced lawyer can help ensure you are able to obtain all the compensation to which you are entitled. It is not uncommon for employers and their insurance companies to discourage or deny claims, even when your injury is legitimate and severe.

At Brent Adams & Associates, our lawyers understand the financial and emotional ramifications that missed work and wages can have on employees and their families. Our legal team can help you fully understand your rights and pursue the compensation you need to recover from your injuries. Contact us to get in touch with a member of our team.