Being self-employed is liberating. You’re your own boss. You can set your own hours. You can choose which jobs you take on and which jobs you turn down. If you work twice as hard, you usually get paid twice as much rather than just getting paid the same hourly rate.
But being self-employed also has its downsides and one of those is that unlike conventional employees, people who are self-employed don’t get sick pay when they are unable to work. This means that if you can’t work, you don’t get paid – even though the bills will still be coming through your letterbox on a daily basis.
This is a serious concern for self-employed people. Conventional employees have the security of knowing that whatever happens, they’ll be fine. When self-employed people are unable to work because they’ve been injured, there’s a very real risk they could lose their home, have their car repossessed, be unable to pay the school fees for their children and so on.
Thankfully, it’s possible to insure yourself against this risk via personal accident insurance.
What does personal accident insurance cover?
Personal accident insurance covers you if you are unable to work because you’ve been injured in an accident. The insurance is usually on a 24-hour basis which means that you don’t have to have been injured at work for claims to be payable.
This type of insurance replaces the income that you’d lose by being unable to work. It does this in two ways.
If your injury is temporary, personal accident insurance pays a weekly benefit. This means that you can cover your mortgage or car loan payments, keep on top of the utility bills and school fees, put food on the table, etc. without having to dip into your savings. When you are recovering from an injury, the last thing you want to be doing is worrying about whether you’ll be able to pay the bills each week.
If your injury is permanent and you’ll never be able to return to your previous occupation, personal accident insurance pays out a lump sum. This lump sum means you wouldn’t need to worry about the finances while you searched for an alternative occupation. It could also contribute towards any training costs you might incur while reskilling for a different trade.
Personal accident insurance also pays out a lump sum in the event of your death as a result of an accident. A lump sum is also payable for certain specific events, such as the loss of a limb or the loss of sight.
Look at the different trades that we insure and see if we can provide personal accident insurance for you.
Standard personal accident insurance only covers lost wages when you are unable to work as a result of an injury. However, most people pay the small additional premium required to extend the insurance to cover work absences due to illnesses and this is why personal accident insurance is often referred to as personal accident & sickness insurance.
As with personal accident insurance, the sickness cover operates in two ways. A weekly benefit is paid if your illness is temporary. If your illness means that you will never be able to return to your previous occupation, a lump sum is payable.
To keep the premiums down, personal accident and sickness policies have what’s called a deferment period. This is commonly two weeks, although it can be shorter or longer.
The deferment period is the time that you need to be off work before a claim will be valid. This means that the insurers don’t have to deal with numerous small claims for one or two day absences and only have to deal with the claims for serious injuries or illnesses.
Often you can reduce your personal accident and sickness insurance premiums by selecting a longer deferment period.