Contractor personal accident insurance is a brand new product offering for 2019 from us at Larsen Howie, but how important is it?
Self-employment is rewarding in many ways but one of the biggest pitfalls is covering your own overheads; without holiday or sickness pay entitlement, time off can quickly impact your personal finances. What can you do to protect yourself and your family should you be out of work for an extended period of time?
What if the worst happens and you no longer have an income?
What is contractor personal accident insurance?
Contractor personal accident insurance – often referred to as PA insurance – protects you and your family from financial loss should you sustain an occupational injury.
Whether an accident happens in your home office, commuting to work, or at work - either in the UK or abroad - contractor PA provides a weekly benefit in the event of temporary total disability or permanent total disability that stops them from working.
- Temporary total disability: an injury that does not result in death or permanent disability, but renders the injured person unable to work in their own occupation for a period of time.
- Permanent total disability: because of a sickness or injury, the injured person is unable to work in their own or any occupation for which they are suited by training, education, or experience.
In the extremely unfortunate event of you losing a limb or your life, PA insurance would also pay out a lump sum.
If such an injury were to happen to an employee, their company would make sure they’re looked after. When self-employed, it’s not quite so easy – any current contracts could be lost along with expected earnings. This, of course, would be disastrous for your personal finances.
Am I required to have contractor personal accident insurance?
The short answer is no, it’s not a legal requirement and your clients probably won’t specify it in their contracts.
However, for contractors in manual jobs – or even freelancers and consultants that frequently travel long distances for work – it’s prudent to have it in place. Accidents happen frequently in trade professions; for the sake of a nominal amount, it’s definitely a worthwhile investment.
HSE published a report on workplace fatal injuries in Great Britain in July 2018 and the statistics speak for themselves. Well over a quarter of all deaths at work are within the construction industry, closely followed by manufacturing and engineering - all of which are typical contractor professions.
Personal accident insurance offers peace of mind which is invaluable, no matter how experienced or careful you are in your day to day practice.
What would my contractor personal accident insurance cover?
As mentioned above, contractor PA cover protects against the financial repercussions of both temporary and permanent total disability, meaning you can’t work in your trade for an extended amount of time.
Should you have to make a claim, there would be a 14 day waiting period before receiving any payments, after which you’d be entitled to weekly benefit payments of £250 for up to 52 weeks. During this time, you can concentrate on improving your health or making alternative arrangements without worrying about mortgage payments, bills or credit card debt.
A couple of example scenarios in which personal accident cover would be a lifeline:
A commissioning engineer falls and breaks their arm at work, subsequently requiring several operations. They remain absent from work for the full 52 weeks payable limit. Their contractor personal accident insurance cover pays the weekly benefit sum during this period, allowing them adequate time to get back to full health properly.
An IT consultant sadly has a fatal car accident travelling to an appointment. His wife is paid a lump sum as per the accidental death benefit specified in his policy, which covers the cost of the funeral and allows her and their children to live comfortably while they get through a very difficult time.
A freelance architect trips in their home office, breaking their dominant hand in the fall which requires an operation to fix. They’re out of work for 6 weeks while it heals, but they don’t have to deplete their savings to keep up with household payments thanks to their personal accident insurance cover.
What else can Larsen Howie do for me?
We’re a one-stop shop for contractor insurance, offering a comprehensive repertoire of products and services for contractors, freelancers, and consultants.
We’re also proud to be IR35 specialists, offering an array of contract review services and tax investigation insurances to make sure you’re as covered as can be. We’re also more than happy to offer genuine advice on what we think you’d need as a contractor, without a sales pitch.
For any further information or advice, please call us on 01163 800 400 or email on [email protected].