Motor vehicle accidents: Don’t leave your experience rating and claims costs to chance

When an employee is involved in a motor vehicle accident (MVA) while on the job, employers often assume that claim costs and fault will be sorted out automatically through auto insurance and/or WCB policies. However, our years of experience dealing with these kinds of claims shows that this is not always the case. Understanding how WCB Alberta handles travel, fault, and cost allocation can save your organization thousands of dollars in claim costs and premiums.

What makes an MVA compensable?

Not every motor vehicle collision that happens while a worker is on the road — even if it occurs while driving a work vehicle — is considered a workplace injury. Routine travel to and from work is generally not compensable. The standard commute is considered a personal activity outside the course of employment. Travel is compensable when it is explicitly directed by the employer — such as running a work errand, traveling between job sites, or driving a delivery route. But there’s an important caveat to this rule: For an employer-directed trip to be considered within the course of employment, the worker must follow the most direct route from where they were dispatched to their destination. Any personal deviation off that direct route — such as stopping at a personal bank branch or picking up groceries miles out of the way — takes the worker out of the course of their employment.

Don’t assume that costs will be divided properly

If a work-related MVA claim is accepted by WCB Alberta, employers often assume that costs will naturally be divided according to who was at fault, but how costs are allocated depends on whether the other driver was a worker under the Workers’ Compensation Act (WCA). If your worker is 0% at fault and a non-worker is responsible, 100% of the claim costs should be recovered from the third party’s auto insurance company. But if your worker is found partially at fault (e.g., 40%), a proportionate amount of the claim costs should be recovered from the driver’s insurance company, relieving your account by that amount.

Under Section 95(2) of Alberta’s Workers’ Compensation Act, workers covered by the Act generally cannot sue other workers or employers covered by the Act. Instead, cost relief occurs via a cost transfer between employers: If your worker was not at fault and the other driver was a worker acting in the course of their employment, 100% of the claim costs are transferred to the other driver’s employer under WCB Policy 05-02. If fault is shared, claim costs are split between the two employers in direct proportion to the amount of fault assessed to each party involved in the accident.

Make sure you get a copy of the report

On paper, WCB’s process for handling MVAs looks simple: the WCB receives a claim, then it obtains the police accident investigation report or PAIR. The file is passed to the WCB legal department so it can investigate potential third-party action involving outside auto insurers, and if there is no grounds for that then the file should be reviewed  for a Section 95(2) cost transfer. In practice, however, this doesn’t always happen.

In some cases, the WCB will not request the police report for such a claim, for a variety of reasons. Without an official police report of the accident, the legal department of the WCB can’t evaluate third-party recovery of costs. And unless the employer explicitly requests a Section 95(2) transfer, WCB will often leave 100% of the claim costs on your experience account. Don’t leave your experience rating and claims costs to chance — make sure whenever an employee is involved in a work-related accident that you obtain a police report for yourself. Do not wait for the WCB to request one.

Once you have the police report, provide it to the claims manager in charge of the file as soon as possible, and explicitly ask them to review the file for third-party action or a Section 95(2) cost transfer. By taking control of the documentation yourself rather than waiting, you ensure that WCB Legal and the claims management department perform the required reviews — protecting your company from higher costs and unfair premium increases.

For advice on these and other workplace situations and their impact on your workers’ compensation claims, you can contact us directly during business hours using our chat feature or by telephone at 1-844-377-9545, or you can connect with us on Facebook, Twitter, or Linkedin, or you can reach us via email at [email protected].