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Self Employed? What you need to know about Personal Accident & Sickness cover, Workers Compensation and Income
It’s important to know the basics about these insurance covers to make the most of your premiums.
Personal Accident & Income Protection are for business owners, while Workers Compensation is legally required for your employees and some (full-time/ regular) contractors.
Workers Compensation
Workers’ Compensation is compulsory for employees and some full-time/ regular contractors. Each state and territory has different requirements, so it’s best to check with your Risk Adviser.
Key Features:
Required by law for employers.
It reimburses wages and medical and rehab costs.
As a self-employed person, you generally can’t get workers’ compensation for yourself.
Workers compensation benefits can be limited, so it’s in your interest to have Personal Accident and/or Income Protection.
Personal Accident and Sickness (PAS) Insurance
Personal Accident insurance covers your weekly income or business expenses to pay bills and expenses if you get injured on the way to or from work, 24 hours a day, 365 days per year.
This insurance will also pay a lump sum if you are permanently injured or even killed.
When you work for yourself, it’s important to protect yourself and the people who depend on you.
Key Features:
Customisable coverage based on occupation and risk.
You can choose the lump sum benefit and the length of time for income replacement.
As a self-employed person, you generally can’t get workers’ compensation for yourself, so Personal Accident & Sickness are the best ways to protect yourself and your family.
This policy is renewed annually and has limits on the type of work and recreation activities covered, so it’s best to discuss the cover with your Risk Adviser.
Income Protection Insurance
Income Protection insurance covers a broader range of illnesses and accidents than Personal Accident insurance. It pays monthly benefits if you are partially or totally unable to work.
Key Features:
Covers a wide range of conditions.
Long-term monthly benefits (Personal Accident stops after 24 months).
There is the option of purchasing non-cancellable cover. This type of policy will remain in place as long as you pay the premium.
This is a broader level of coverage for individuals seeking a better level of long-term income protection.
Summary
Workers’ Compensation is compulsory for all employees and some contractors. It has limited benefits, and self-employed people are usually not eligible.
Ensure that your key risks are well managed and that you have good insurance in place for financial protection. As a business owner, managing your personal financial risk is just as important. Talk to your Risk Adviser to find the best options that suit your needs and budget.
The views expressed in this publication are solely those of the author; they are not reflective or indicative of M3’s position and are not to be attributed to M3. They cannot be reproduced in any form without the express written consent of the author.