As a professional dog trainer, you are aware of the need to carry liability insurance to protect yourself against lawsuits alleging bodily injury or property damage to others, including your clients and the dogs in your care/classes. But what about those injuries that you, your employees, or your subcontractors incur while on the job? Our agency has received a number of calls over the years from trainers that thought their training-related medical injuries were covered by their liability insurance, only to learn at the time of the claim that there was no coverage for injuries to themselves or anyone in their employ.
It is important to note that the APDT liability policy is a general liability insurance policy that provides coverage for bodily injury or property damage claims to a third party caused by your negligence. There is absolutely no coverage whatsoever under the APDT liability policy (or any other general liability policy) for injuries sustained by you or your employees. The exclusive remedy for injuries to you, your employees, and anyone required by your state statute to be covered is worker's compensation insurance. This includes covering claims such as dog bites, slip or trip and falls, auto accidents while en route to a client's home or training facility/class, etc. All of these are claims trainers have incurred over the years.
Unfortunately, unless you or one of your employees have been injured on the job, it might be hard to fathom carrying this insurance. However, I recommend you give careful consideration to the consequences of not carrying this coverage, especially if you are hiring others to work in your business. Suppose you or one of your employees suffered a significant injury from a slip and fall or dog bite and were unable to work for a number of weeks. Although you and your staff may have health insurance, you will find that health insurers typically look to exclude work-related injuries. And even if your health insurer does cover the medical portion, they most certainly will not cover your lost wages while you are unable to work. According to the National Council on Compensation Insurance (NCCI), as of July 2014, the average medical costs on a lost time claim were approximately $28,800, while the average indemnity cost (lost wages/settlements) on a lost time claim was approximately $22,700. There is a good reason why all those workers compensation attorneys advertise on television throughout the day—"Have you been seriously injured on the job?"
Workers compensation covers all work-related injuries arising out of employment and occuring during the course of employment. It also covers occupational diseases resulting from employment, and employers' liability that is excluded from employment. It is the exclusive remedy for work place injuries, meaning the employee relinquishes the right to sue the employer in exchange for a guaranteed set of benefits. Workers Compensation benefits include payment for medical expenses, disability (loss of income), rehabilitation, and death.
Each individual state has its own workers compensation statute and the specific laws and benefit amounts vary from state to state. Coverage is compulsory in all states with the exception of Texas. But states do differ on the requirement based on the number of people you employ or in which you have an employee/employer relationship (this can be tricky so be sure to follow your state law). Some states require you to insure if you have even one employee, while others may say three employees. Even if you have fewer than the number required, you still may be liable for an employee's injuries, so be aware of your state requirements. Fines for not carrying coverage can vary anywhere from $250 a day up to $5,000 for every ten days you neglect to purchase coverage. And many state laws will specify that failure to have coverage due to lack of knowledge is not a valid excuse for failure to insure, so please be aware if you hire or subcontract anyone to work for you or on behalf of your business.
Furthermore, each state's workers compensation statute also differs on how they view independent contractors and/or subcontractors. Some states will say you are responsible for injuries to your subcontractors if:
- They do not have coverage in place and they are told how to perform the work.
- They fail to meet certain criteria such as having rights to make a profit or loss or having the ability to control the work.
- They fail to provide you with proof they are insured.
While other states will hold you responsible for the subcontractor's employees or helpers if they are injured (even if you didn't know the subcontractor was hiring or using a helper) and that subcontractor failed to have a workers compensation policy in place.
If you utilize independent contractors/subcontractors in your business and are not 100% certain you are not liable for their injuries, I recommend contacting your state workers compensation board/bureau/regulator, reading your state workers compensation statute (all typically define independent contractor/subcontractor relationships and can usually be found online), and/or contact an accomplished workers compensation attorney in your area for consultation. It is always better to find out before the claim occurs!
If it is determined that there is an employee/employer relationship, workers compensation is the exclusive remedy and only way to cover an employee. Therefore if you do not wish to have an employee/employer relationship and purchase your own workers compensation policy, it is recommended that you consider requiring your independent contractors to purchase their own policy and provide you with proof via a certificate of insurance each year on the annual effective date of their policy. This not only strengthens the fact that they are a true independent contractor and keeps you from placing your business at risk, but it also ensures that anyone the independent contractor hires or utilizes as a helper is covered.
As always, if you have additional insurance questions or concerns or want to know more about your individual state requirements, please feel free to contact us anytime at 1-800-962-4611 or via email at dp@business-insurers.com.