Guest Article from Glenn Caldwell.

Glenn is the Vice President Corporate Development

Healthy Trucker / NAL Insurance Inc

The majority of fleets in Ontario have allowed their Owner/Operators to opt out of WSIB and purchase a private alternative that covers them for accidental injuries on and off the job, 24 hours/7 days a week. It’s important to understand that there is a process that needs to be followed in order to reduce their liability as a Fleet, remain compliant and avoid hefty fines from WSIB.

Who Can Opt-Out?

O/O’s that own their own vehicle and pay the majority of expenses have the ability to opt out.

An 1149A (WSIB Independent Status Document) must be completed and signed by all O/O’s and the Fleet and forwarded on to WSIB for consideration. Be sure to provide a copy of the vehicle ownership, articles of incorporation (if applicable) and a copy of their business registration (if applicable) to avoid delays.

Once approved, the O/O will receive a letter back from WSIB confirming that they have received independent status at your company, or that they need to provide additional information. Please ask your O/O to provide you a copy of their Independent Status letter from WSIB for their on file.

O/O’s then have 3 choices

1. Personal Coverage with WSIB

2. Private Coverage

3. Nothing at all

Although number 3 is definitely an option, it’s not one that we support for the following reasons:

"The Guarantee looks for best practice controls to be in place to help protect the insured as well as their transportation policy.” says John Farquhar- Risk Solutions Specialist, Transportation at GCNA.

“These best practice controls must include a good solid alternative workplace coverage that is mandated for all owner operators. This program must be administered by the insured carrier either with the owner operator paying into the program and the provider monitoring compliance with reports back to the insured or the insured paying for the program on behalf of the owner operator. These are controls that must be in place to minimize the associated risks.”

Points to Consider

1. When an O/O opts out of WSIB, it gives them the right to sue both the Fleet and their Customer.

2. Injury claims for any vehicle related injuries will be directed to the Statutory Accident Benefits of the Fleets Auto Policy (or Captive).

Who CANNOT Opt-Out

Employee Drivers and Contract Drivers are automatically covered under WSIB, regardless of the type of contract that the Fleet has with them. Although there are fleets that have perhaps made “special arrangements” with a Contract Driver’s agreement, also known as “Driver Inc.”, unless this driver contracts their services with 4-5 other companies throughout the year, he/she is considered a worker and WSIB must be paid.

“Workplace Safety and Insurance Board has sanctioned dozens more Ontario-based fleets for using Driver Inc. to avoid paying premiums,” the Ontario Trucking Association said Friday.


Private Coverage

When a fleet allows their O/O’s to opt out of WSIB, we strongly recommend that they require that their OO’s to purchase a comprehensive alternative to WSIB. This helps reduce their liability and help control costs. (feel free to contact me to receive a recommended minimum standard).

Offering a comprehensive solution through settlement deduction will ensure O/O’s not only purchase coverage, but in addition because fleets are paying the premium on their behalf (and charging them back), they can ensure their coverage has also been maintained. We also recommend that fleets select a provider that can instantly provide status updates, claims history and payouts for MVA type claims to avoid double dipping under the Statutory Accident Benefits (SAB’s).

Aysegul Tuncertan – Director of Underwriting and Safety Services at Old Republic Insurance Company of Canada has this to say about what they look for, “When our insureds look for WSIB Alternatives for their Owner Operators, there are a number of things that are important to us as the Automobile Insurer:

1. What's the track record of the WSIB Alternative they are signing up for?

2. What are the coverages offered and how do they benefit the insured?

3. How can the Fleet Owner ensure that the Owner Operator enrolled in and stays enrolled in the WSIB Alternative program?

She goes on to suggest that they pay close attention to these policy terms:

1. Subrogation clause against Auto Policy?

2. Who is the 1st payer?

WSIB Alternative Evaluation

Most accident disability policies look very similar on the surface and can be very confusing unless fleets know what to look for. Generally when an O/O is shopping for coverage they look at two things;

1. How much does it cost?

2. What’s it going to pay me if I get injured?

Not all O/O’s will look at the general limitations or exclusions that can leave them and their fleet fully exposed.

“If a carrier’s Owner/Operators qualify to opt out of WSIB, and elect to do so, the carrier should ensure that each O/O secures alternative private insurance, to help protect the carrier against claims under their insurance policy,” reports Scott Creighton - Director, Risk Services Transportation & Logistics at Northbridge Insurance.

With primary insurance rates continuing to skyrocket, this is one area a fleet can help control their costs.

Fleets wanting to have a better understanding of the policies that their O/O’s have purchased are encouraged to have an evaluation of the coverage done by an industry expert. An expert that truly understands what to look for can provide a written analysis of any limitations that leave the fleets auto policy exposed.


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