There are a lot of good reasons to have adequate disability insurance. Now you can add this to your list: if you or your drivers don’t have it, you may not be able to get work. Not with some shippers, anyway. They’re cracking down on uncovered drivers who, as far as they’re concerned, are lawsuits waiting to happen.

When a shipper contracts a carrier to haul goods, he can safely assume the carrier’s drivers are all covered by workers’ compensation. Unfortunately, the same can’t be said of the owner-operators who are subcontracted by the carrier.

And since you can’t tell at a glance who’s a company driver and who’s an owner-operator, more and more shippers are now taking steps to ensure that every driver they deal with has adequate disability insurance.

Some shippers like Hamilton, Ont.-based steel giants Dofasco Inc. and Stelco Inc. have simply stopped loading anyone who cannot prove they have adequate coverage.

“We’re requiring all contractors who come onto our site to have WCB coverage,” says Dave Halcrow, manager of the traffic department at Dofasco. “If there’s a problem on our site, we don’t want to be held responsible.”

The confusion stems from the option that owner-operators have in every province but New Brunswick and Saskatchewan to decline coverage from the Workers’ Compensation Board-or, as it’s now known in Ontario, Workplace Safety and Insurance Board (WSIB). “We’re saying, sure, you have the option to opt out of WSIB. That’s fine. But you also have the option of not working at Dofasco,” Halcrow says. “We simply want everybody coming on our site to be covered, and we’ve stopped loading some drivers who don’t meet the requirements.”

For its part, Stelco has also developed a new policy regarding disability insurance. It’s tied up in a new contract that lays out the responsibilities of Stelco contractors-including the type and level of insurance coverage that’s required.

“We’ve chosen WSIB for the protection it gives to us when we do our due diligence,” says Bob Easter, Stelco’s transportation manager. “The policy we’re putting in place does not zero in on the trucking industry. All contractors who are working on our property must show proof of WSIB.” Easter says the new policy, which is expected to be in place by the end of the first quarter of this year, is all about workplace safety. “This is just the way we do business,” he says. “We do over 600 truck checks a quarter, looking to make sure loads are secured and tarped properly. This is just part of our ongoing due diligence.”

This new vigilance from shippers has been growing for some time, says Mike Burke, manager of government relations at the Ontario Trucking Association.

“A lot of shippers are doing that, it’s certainly not unique to the steel companies,” he says. “They want to make sure that whoever is working on their grounds is covered by the WSIB, either through their employer, or, if they are independent, that they have sought independent coverage on their own.”

This attitude from shippers follows years of confusion about workers’ compensation coverage on the part of the trucking industry, says Dennis Blunt, a disability management advisor with a specialty in workers’ comp issues at D.B. Blunt & Associates Inc., in Burlington, Ont.

“It’s a growing trend for shippers to be more concerned about this because of the liability aspects of it,” he says. “There have been instances that have caused shippers to be more vigilant.” Blunt says adequate disability insurance is the responsibility of the highest contractor. So if a trucking company hires an independent operator, the trucking company must ensure that the owner-operator has coverage, and that the account is in good standing.

He says if an owner-operator who doesn’t have workers’ compensation or equivalent private insurance coverage is injured on the job, the carrier and the shipper are both in very vulnerable positions.

“That driver now has the option to sue everybody and anybody, including where he was on-site doing his delivery,” says Blunt. “It’s human nature to go after the company with the largest pockets.

“There have been circumstances where either that large company has lost a lawsuit or settled out of court, and they’ve learned a very costly lesson.”

Halcrow says Dofasco has cracked down after years of non-compliance by carriers on the issue of WSIB coverage for their company drivers and contracted owner-operators.

“We can’t have some people on our site who are covered and others who are not,” Halcrow says. “I’m going after the corporation that hires these independent owner-operators. I’m going down the chain of command only one layer. If you subcontract that work out, it’s your responsibility to see that your subcontractor meets my requirements. Otherwise do not subcontract it out.”

He says Dofasco looked at many options to ensure compliance, including a signed letter from the carrier assuring that all drivers would be covered and Dofasco would not be on the hook for any injuries occurring on Dofasco property. The idea was dropped.

A letter “isn’t worth the ink it’s written with,” says Halcrow.

“I would think it would be thrown out in court because the owner operator who has just started to work for ABC carrier company, he started last week, he doesn’t know that this letter between ABC and Dofasco is on file,” he explains. “He never made an agreement with ABC that he’d be covered in this way. So it would be thrown out right away.”

Instead, what Dofasco wants is a WSIB certificate of clearance pertaining to every driver who will be on site. The certificate, updated every three months, guarantees that the insurance account is up-to-date and in good standing.

Furthermore, for Dofasco, anyway, it must be WSIB. “Our corporate people on the legal side are saying they don’t want to deal with private coverage,” he says.

This can be a problem for some owner-operators who consider workers’ compensation to be expensive.

Leo Van Tuyl of the Kitchener, Ont.-based Truckers’ Business Consulting Group is a former owner-operator who now deals in business skill seminars, business software, and insurance. He says, generally speaking, most owner-operators would prefer not to be forced into workers’ compensation because of the cost. Geared to income, WCB coverage can run in excess of $3300 per driver per year.

More problematic, however, is that because owner-operators like to keep their taxable income as low as possible, when they make a claim they’re often assessed on an income figure which has been reduced for tax reasons.

“It’s priced like a Cadillac, but it’s Geo quality when it comes to making a claim,” Van Tuyl says. “Workers’ comp doesn’t reflect reality at all. It’s certainly not geared to the owner-operator.” He says he likes the B.C. model in which owner-operators can purchase relatively affordable minimum coverage from the Workers’ Compensation Board of British Columbia and then top it up with private insurance.

Blunt says confusion about who is classed as an independent operator as opposed to an employee is rife in the trucking industry.

In Ontario, the WSIB is stepping up inspections of trucking-related businesses to ensure they’re in compliance.

“It’s no longer a matter of if you’ll get caught. It’s a matter of when,” he says. “I tell my clients and any trucking business out there to ensure they are compliant with the Workers’ Compensation Act because eventually someone in the field will get out to you.”

For Halcrow, the issue has less to do with the fear of liability than it does with having a safe workplace.

“Our carriers drive through some areas of the plant where there are definite hazards,” he says. “They have to get on the back of that truck, they have to chain their loads down, they have to do load securement, and there are overhead cranes moving above them. It is not exactly devoid of safety hazards.”

Halcrow admits it has taken some time for the carriers and drivers to get used to the new vigilance. A few recent “blitz days” identified a number of drivers who hadn’t provided proof of WSIB coverage. Halcrow says those drivers will be turned around at the front gate if they don’t get their papers together.

“They didn’t think we were serious,” he says. “Well, I’m getting more serious as the days go on and we will continue to get more serious about this issue until it’s locked down solid.”