WSIB or Private Insurance-Which is Best?

Recently, the topic of interest in my client and networking circle is the difference between a “private”workplace insurance policy and the WSIB.

While neither system is perfect, there are some myths and misconceptions out there that you should be aware of. It is not my intent to promote or discredit either form of coverage.

Most business owners will agree that liability to employees due to workplace injuries is a costly concern. Since some industries are inherently more dangerous than others, our Government decided many years ago that for everyone’s “best interest”, there should be a no-fault insurance program to provide injured workers with compensation and assistance. And so, the Workplace Safety and Insurance Board (WSIB) came to be.

Prior to the WSIB “Employee Injury Liability Extensions” were purchased by companies, and they are still in use today. The Extensions are added to a Commercial General Liability Insurance policy.

For workplaces that are “low” or “medium” risk (office settings or retail stores, for example) there may not be a mandatory requirement to participate in WSIB.  These workplaces can purchase an extension on their Commercial General Liability policy, or they could “opt in” to WSIB if they feel that the WSIB coverage is better for their particular needs.

Other workplaces such as construction sites or health care facilities come with more risk, so their participation in WSIB is mandatory to ensure that injured workers are given the assistance they need (financially as well as healthcare).

I have the Injury Extension policy so the Occupational Health and Safety Act (OHSA) and the Workplace Safety and Insurance Act (WSIA) don’t apply to my business.

Wrong! The OHSA applies to all workplaces, regardless of which insurance type you have.  Your business is still responsible for ensuring all Health and Safety legislation and policies are in place and utilized.

The Ministry of Labour (MOL) can levy fines to any workplace under the provisions of the OHSA; therefore private insurance may not cover the claim if it can be “proven” that the workplace was not following OHSA practices.

For companies who opt in to WSIB, fines and penalties under the WSIA can be levied in addition to anything the MOL may levy under the OHSA.

WSIB is more expensive than the private insurance.

This may be true from a “premium dollars paid” perspective, as WSIB charges a percentage of your annual payroll (percentage is based on risk and varies by business type) while the Liability Extension would charge an annual premium based on their own standards and criteria.

However, the other side of this argument is that in exchange for those higher premiums, WSIB workplaces are offered programs and assistance at no or very little cost such as the Office of the Employer Advisor, access to professionals who will come to your workplace and do ergonomic and other risk assessments, and other resources not available from the private insurance companies.

More importantly, there are no “caps” on coverage for the injured employee. Some private insurance policies will limit the amount of coverage they provide; or worse, the insurance policy is not valid or was cancelled due to some clerical error and the employee’s claim is denied. If that happens, the business would be liable for any financial damages the employee seeks.

Yes, WSIB can and does deny claims for coverage.  But when challenged at a WSIB Tribunal hearing the employee is usually awarded benefits if the injury truly happened at or because of their work.

Employees’ ability to sue for damages when injured in a workplace is limited by the OHSA.

Not quite. It’s the WSIA (not OHSA) that severely limits the injured employee’s ability to sue an employer for damages when injuries or illness occur as a result of work.  However, where the employee can show severe negligence on the part of the employer, (for example, the MOL lays a charge) the right to sue has been upheld.

If not participating in WSIB, the employee has no restrictions on the right to sue other than the statute of limitations. The employer’s private insurance coverage (payout to employee) would be subject to any deductible amounts, as well as the payout limits on the policy. So if the employee wins $3million in damages, and your policy only covers your business for $2million, the business (and therefore the owner) is responsible for the remaining $1million.  Ouch!

Got any questions on this or other HR topics? Contact me! I would be happy to help.