Canadian Occupational Safety

October/November 2015 11 DAVID MARCHIONE PEOPLE&PLACES WORKERS' COMPENSATION DAVID MARCHIONE PEOPLE&PLACES Executives may need personal coverage High-level personnel often not insured under workers' compensation S ome years ago, while working for the Workplace Safety and Insurance Board in Ontario, I adjudicated a claim where the owner of a small construction company sustained a broken leg when he fell off a block wall to the ground. I had the unpleasant task of advising him that, as the owner and unlike his employees, he did not automatically have workers' compensation coverage and that I could not authorize any health care or wage loss benefi ts for him, as he had not purchased any optional coverage for himself through the compensation board. Understandably, he was not pleased. Companies often assume once they register for coverage with their respective provincial compensation board, all employees are entitled to the same coverage and benefi ts in case of a workplace injury or illness. Com- pany owners, directors and executive offi cers often assume if they are pro- viding labour, or working as part of the day-to-day business activities, they are entitled to compensation benefi ts in the event of a workplace accident. That is not always the case, as these individuals are generally not consid- ered to be "workers" as defi ned by their respective compensation board. While some jurisdictions, such as New Brunswick, Newfoundland and Labrador, Saskatchewan and the Yukon include directors and executive offi cers in the defi nition of "worker" if they are maintained on the company's payroll, other jurisdictions, including British Columbia, Alberta, Ontario, Nova Scotia and the Northwest Ter- ritories and Nunavut exclude business owners, directors, executive offi cers and partners in a partnership from automatic coverage. It is important each company confi rm who is covered within its organization and who is exempt in order to ensure proper coverage for all who require it. This becomes especially important if the owners, directors or executive offi cers are "working" executives and providing labour services for the organization, as an injury may leave them without a source of income if they do not have other insurance coverage. In those jurisdictions where cer- tain individuals are excluded from automatic coverage, including owners, executive offi cers and direc- tors, those individuals can opt in to the compensation scheme by pur- chasing individual coverage. Such coverage goes by different names, including personal optional protec- tion (British Columbia), personal coverage (Alberta) or optional insur- ance (Ontario). Generally, this type of insurance can be purchased at the employer's premium rate, and is based on the purchaser's level of income up to the maximum insurable earnings in that province. When a director or executive has purchased individual coverage through the compensation board, he is then considered to be a "worker" in the same manner as those who are automatically covered by the com- pensation scheme. In the case of a workplace injury, he may be entitled to health care and other benefi ts, and would be precluded from being able to bring an action against the employer and others. It is important for organizations to confi rm whether or not their execu- tives are covered by their respective compensation boards for two rea- sons. First, if directors and executive offi cers are automatically covered, the organization must ensure their payroll is being reported to the com- pensation board accurately. This can help prevent a retroactive adjustment for unpaid premiums in the event of an audit by the compensation board or, in a worst-case scenario, potential charges under the applicable workers' compensation legislation. Second, if directors and executive offi cers are not automatically covered, companies should ensure their earnings are not being included with payroll informa- tion to the compensation board. This will help avoid unnecessary overpay- ment of premiums. David Marchione is an occupational health and safety consultant and paralegal at Fasken Martineau DuMoulin in Toronto. He can be reached at (416) 868-3463 or dmarchione@fasken.com.

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