Did you know that according to the Health and Safety Executive, over 440,000 people sustained workplace injuries during 2020/21? While approximately three-quarters of these were minor injuries that required less than seven days absence, just over 100,000 injuries resulted in medium or long-term time away from work – something which is less than ideal, particularly for sole traders without relevant self-employed income protection insurance.
If you find yourself out of work due to injury or illness, regardless of whether the injury was sustained in the workplace or not, the consequences can be drastic. This is particularly if you are a sole trader or receive insufficient sick pay. Thankfully, there is a range of insurance policies available to protect against loss of earnings due to ill health. The right choice for you will depend on your circumstances. In this article we’re going to focus on the differences between personal accident and sickness insurance in comparison to business income protection.
What is personal accident and sickness insurance?
Personal accident and sickness insurance is a policy that pays out compensation, usually in the form of a lump sum, if you suffer a serious injury or pass away as a result of a work-based accident that wasn’t your fault. This type of policy helps protect you and your family against income loss in the event of you being unable to work. It can be useful to help cover the cost of medical expenses, bills and everyday costs.
Personal accident and sickness insurance is usually offered as an optional bolt-on to relevant life insurance policies. However, it can also be purchased as standalone cover. Most insurance providers will offer it to anybody who is self-employed or in full-time employment. Also, you must be and between the ages of 18 to 70.
What sort of injuries do personal accident and sickness insurance cover?
As well as protecting you in the workplace, personal accident and sickness insurance would cover:
• Injuries caused by a road traffic accident
• Injuries caused by slips, trips or falls
• Damage sustained due to violence
• Permanent degenerative disabilities
• Amputations or loss of the use of body parts
What is business income protection?
Business income protection insurance is a long-term insurance policy that provides a regular replacement for a portion of your income should you become unable to work. Most of these policies cover illness, injury and disability, while others will also cover unemployment and involuntary redundancy.
Why is business income protection insurance better than personal accident insurance?
While a personal accident and sickness policy will pay out a lump sum in the event of you being unable to work due to injury, income protection insurance provides a long-term solution by offering ongoing payments until you are well enough to go back to work, or until you reach retirement age (this will depend on the individual terms of your policy). Business income protection insurance can therefore be considered a more reliable form of income. This allows you to continue to provide for your family and pay the bills as normal while you are out of work.
What does business income protection insurance cover?
A business income protection policy will provide you with regular monthly payouts to maintain your standard of living while you are unable to earn a wage. It can protect against things like:
• Injury: if you have sustained an injury in an accident that has left you unable to work.
• Illness: if you are temporarily or permanently ill and deemed unfit for work.
• Unemployment: certain policies will protect against involuntary redundancy.
Should you be unable to work, you can expect to receive around 65% to 80% of your annual earnings with an income protection policy. This can provide you with peace of mind and allow you to focus on recovering instead of stressing about paying the bills.
Find out more about business income protection insurance today
If you’d like to find out more about the insurance options available to you, please feel free to contact WIS Business Protection today for a no-obligation free chat. Our friendly and experienced team will be happy to discuss your requirements and advise you on the best policy for your circumstances. We can also provide you with further information on how business income protection works.