In a few weeks, Ontario's WSIB mandatory coverage will be extended to self-employed sole proprietors, partners in partnerships and officers of corporations in the construction industry. Contractors who are carrying independently-purchased disability insurance need to take a close look at how their own coverage dovetails, or conflicts, with that of the WSIB. If you don't, you might find that you are wasting money and not getting the coverage you need.
December 17, 2012 by Alec Caldwell
Most Ontario contractors I’m sure know by now that in a few weeks WSIB’s mandatory coverage extends to self-employed sole proprietors, partners in partnerships and officers of corporations in the construction industry, whether they like it or not. Suddenly all these individuals will lose their independence and be forced into the compulsory WSIB system, with few exceptions.
This aggressive extension of the WSIB’s reach is already starting to cause concerns amongst those affected. And not just because of being forced into the system; it’s the ripple effect of how many will now be forced to treat any individual disability income insurance coverages that they already have. Will this be a duplication of coverages? If so, can you afford to pay both in today’s economy?
We all know that the WSIB covers you for injuries at work and the loss of income if you cannot work because of those injuries. Independent disability income insurance works along the same lines, but normally goes a little further and extends coverage to included off-the-job accidents, accidents on weekends and illness – if you have those eventualities added.
There is no doubt that some duplication will occur if you decide to carry independent disability insurance as well as the WSIB. So don’t expect each to pay you fully if you’re disabled at work and you can’t work. Most independently-purchased disability income insurance coverage carries an offset clause. This allows insurance companies to reduce what they’ll pay you dollar for dollar on any money coming to you from WSIB. Meaning for every dollar of income you receive from WSIB, the insurance company will remove that dollar off their payment to you, sometimes down to half the monthly income benefit you expected, or to zero, where you receive no payment!
Now some good news, there are a few coverages out there that correct this unfairness and do not carry an offset clause. Meaning they’ll pay you the full monthly income benefit, regardless of what WSIB or your auto insurance company may pay. Right now a good number of contractors we’ve talked with are considering changing over to this type of coverage or simply going with the non occupational version that is built around WSIB and tops up a person’s coverage to 24 hours a day, 7 days a week, without them paying duplication costs.
If you want to explore your option,s CARAHS can help you do this with its newly introduced “Know your options” service. Anyone can use our free service, by contacting our qualified advisors, who are equipped to answer your questions. Contact us by email or toll free.
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CARAHS is a non-profit Occupational Health & Safety Association delivering education, training & benefits to self employed contractors, renovators, builders & trades.