Prop 22 and Occupational Accident Insurance: Everything You Need to Know

What is Proposition 22?

California’s Proposition 22 (or “Prop 22”), is a ballot measure that keeps gig workers on platforms like Uber, Lyft, DoorDash, and Instacart classified as Independent Contractors (1099), rather than Employees (w-2). Proposition 22 passed with 58% of Californians voting in favor of the ballot measure on November 3, 2020.

While Proposition 22 allows gig platforms to classify their workers as ‘Independent Contractors,’ a historically underprotected classification, it also implements requirements aimed at closing the gap between these workers and traditional employees. However, it’s important to note that the majority of these measures apply only when the worker is ‘engaged,’ meaning that transition time between rides, deliveries, or jobs is not covered.

These are the main protections added under Proposition 22:

• Earnings guarantee of at least 120% of minimum wage while on the job
• $0.30 / Engaged Mile for expenses
• Healthcare stipend
• Discrimination and sexual harassment protection
• Auto accident and liability insurance
• Occupational Accident Insurance.

What is Occupational Accident Insurance?

Occupational Accident Insurance (OAI) is an equitable replacement for Workers’ Compensation that better suits Gig Workers / Independent Contractors. The low hourly cost (typically under $0.50) is charged only for the time that gig workers spend on the clock, making it much more agile and affordable than an annual workers’ compensation policy would be. Many on-demand platforms began working with Bunker to implement Occupational Accident programs for their workforce long before it was mandatory. Adding Occupational Accident as a default protection for Gig Workers is an important step towards creating a workforce that can be both flexible and equitable at the same time.

What is Covered under Occupational Accident Insurance?

Unlike workers’ compensation, which has static costs, limits, and protections determined at the state level, Occupational Accident Insurance can be tailored by the platform to fit their workers’ needs. These are some of the common benefits available under an Occupational Accident policy:

• Accidental Dismemberment
• Non-Occupational Accident Benefit
• Survivor’s Benefit
• Hernia and Hemorrhoid Benefit
• Accidental Death Benefit
• Passenger Accident Benefit
• Temporary and/or Permanent Total Disability
• Accidental Medical Expenses
• Acupuncture Care and Spinal Manipulation Care
• Mental and Nervous or Depressive Condition
• Physical, Occupational or Work Hardening Therapies
• Accidental Paralysis Benefit

To learn more about tailoring an Occupational Accident Insurance policy to your workforce, email scott@buildbunker.com!

How is a Worker’s Payout Calculated?

Coverage is typically divided into several areas, for which the payout has a different formula. For example, the amount available for medical benefits arising from a single incident is related to the cost of medical care. Alternatively, Accidental Death and Dismemberment Benefits are calculated as a multiple based on a worker’s estimated annual salary.

What’s the Difference between Occupational Accident and Workers’ Compensation?

…..	Occupational Accident	…….	Workers’ Compensation
…..	.. Covers Independent Contractors ..	…….	Covers Employees
	..
…..	Limits and benefits are set by the platform	…….	Limits and benefits are set by the state
	..
…..	.. Charged on a ‘pay-as-you-go’ basis, based on hours on the clock ..	…….	Charged as an annual premium, and audited for changes in risk
	..
…..	Hourly costs are (often) passed down to the worker	…….	Premium costs are paid by the employer
	..
…..	.. Required by Prop 22 if you have Independent Contractors ..	…….	Required by law if you have employees

How do I get Occupational Accident Insurance?

Bunker has been helping innovative Gig Marketplaces / Platforms implement Occupational Accident Insurance policies for years (among other on-demand liability insurance programs). In fact, we were one of the first to work with insurance carriers to transition the product from its origin in the trucking industry to a gig economy staple! Reach out to Bunker, and we’ll help you build the perfect solution for your marketplace! Click below and tell us a bit about your business, or email scott@buildbunker.com to get started.

How it Works:

• Bunker helps you implement Occupational Accident Insurance, add it to your terms and conditions, and automatically deduct the cost from your workers’ payroll.
• Any contractors who already have workers’ compensation can opt out, by uploading their Certificate of Insurance to Bunker. We’ll screen, verify and monitor their insurance so you don’t have to think about it!
• You’ll pay one bill each month, calculated based on the total hours your workers spent on the clock, so no one is paying for coverage that goes un-used.
• If your platform is too small for a traditional Occupational Accident Insurance policy to be cost effective, we’ll work with you to create an innovative solution that protects you and your workforce!

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What if We’re Not in California?

Proposition 22 is fundamentally geared towards the worker, rather than the business. So, even if you don’t have a corporate location in California, you’ll likely still have to make adjustments if you have any workers in California. For most businesses, it will make more sense to begin making these adjustments across the board for a few reasons:

• Occupational Accident (and other usage-based insurance products) become more accessible when they’re covering a larger workforce (cheaper hourly rates, lower down-payments, etc.)
• Proposition 22 will likely become a blueprint for similar ballot measures in the coming months and years
• Marketplaces will begin offering these benefits on a national scale, meaning increased competition for independent contractors in all states, who will now be able to factor insurance into their work choices on a larger scale.

What Other Types of Blanket, or On-Demand Insurance Options Can We Provide?

Bunker has worked with carriers for years to develop usage-based models for a variety of liability insurance products, including Auto Liability, General Liability, and Professional Liability, among others.

The key difference between Occupational Accident and these products, is that Occupational Accident Insurance covers harm that befalls your independent contractors (i.e. their medical bills), whereas other forms of liability insurance cover the harm that your independent contractors cause (i.e. lawsuits and damaged property).

Bunker works with you to create a custom solution combining protection for you, protection for your independent contractors, and protection for your end clients. To learn more about your options, or start designing a custom, on-demand insurance solution for your business, reach out!

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