Contingent Liability Insurance: the third leg of the stool
Contingent Liability insurance is a low-cost policy that shields you in the event that an independent delivery driver who is covered by Occupational Accident insurance nevertheless makes a workers compensation claim against your company. Nothing legally prevents a driver from doing this, and just one driver’s claim can spark a ruinous IC audit on your Workers Compensation policy.
Why would independent drivers make WC claims? Some have no insurance and are desperate. Some have Occupational Accident insurance but don’t understand this gives them benefits similar to WC. Others may think they can ‘double-dip’. Regardless, these claims do happen, and when they do your WC insurer will pay out either to cover the claim or defend against it. Either way, the claim may well trigger the audit you hoped to avoid.
Contingent Liability insurance can stop this process before the trigger gets pulled. It steps in to handle a driver claim so your WC doesn’t get drawn in. It’s the third leg, together with WC and driver occupational accident insurance, that makes for a reliable “three-legged stool” approach to taming driver injury risk.