What do I need to know about accident insurance?

Insurance is vital for our peace of mind. For a freelancer or self-employed person, accident insurance is absolutely critical: you rely on your health to generate an income. This article will explain the benefits of accident insurance, and a few questions you may have about it.

What is accident insurance, and what’s the benefit of it?

Personal accident insurance provides financial protection for your business. If you are injured in an accident and unable to work, your insurance will cover you. You receive payment either as a lump sum or in weekly payouts: covering the loss of income when you’re unable to work.

For example, if you are in a car accident and unable to work for several months, your insurance will cover your back in the meantime. Accident insurance is particularly important for a freelancer or self-employed individual, as you could financially in the event of an injury more so than an employee, who might be covered by their company.

What does accident insurance cover?

This insurance typically covers death, permanent disability, and loss of (or loss of use of) a body part in the event of an accident. However, the specific details of what is covered will vary somewhat between different insurance companies policies, so you should check your policy document.

It’s very important that you understand what accident insurance doesn’t cover. In the event of sickness, or a general disability, you are not covered. For instance, if you are unable to work due to medical circumstances caused by an illness, you will not receive an accident insurance payout.

You are only protected against accidental bodily injury or death, like being unable to physically work due to an injury in your back as the result of an accident, i.e falling down the stairs. It’s worth remembering that accident insurance doesn’t always need to be work-related, but will cover an accident that happens anywhere.

For ultimate protection, it’s advised that you pair personal accident insurance with general medical insurance: protecting you and your business in all eventualities. Make sure you’re prepared for anything and get yourself covered.

Some basic information about accident insurance

How much is accident insurance?

The cost of insurance depends on your personal circumstances, including your occupation, health, income, and other factors. It’s highly recommended that you shop around different insurance companies to make sure you get the best value quote for you.

How much should you be covered for?

You should consider how much income protection you require. For example, if your business turns over a certain amount in a year, it will be unhelpful if you are only covered for half of the year and you are then injured and unable to work for the full year. However, how much you wish to be covered for is a personal decision, but in general, it’s advised that you get covered for the highest value you can afford to make the payments for.

You should consider how vulnerable your income is, in the sense of a potential accident. For example, if you’re a programmer, your hands are an extremely important part of your body: without them, you can’t run your business. In the event of an accident causing serious damage to your hands, you could be rendered unable to generate an income for some time. In this scenario, it’s even more important to splash out on the best insurance policy you can afford.

Does personal accident insurance cover you in the event of a car crash?

Most car insurance policies will offer personal accident insurance cover (at a higher premium). This would cover you for any accident that occurs when you are driving. The benefit of already having a stand-alone accident insurance policy, separate from your car insurance, is that you will likely be covered for personal accident costs after a crash anyway, but it’s worth checking over your policy.

How long before the insurance company pays out?

It will vary from company to company, but the details should be in your policy. Generally, it’s typical for a claim to be paid out within 30 days of the accident.

How long do you have to report an accident to your insurance company?

Many policies will require you to inform the insurance company within 24 hours, however, this varies from policy to policy. It’s vital that you report your accident to your company as soon as possible, to ensure you receive your payment quickly. If you are physically unable to report your accident to an insurer, you should advise a trusted family member or medical professional to do so on your behalf in this scenario.

Can accident insurance cover someone who works with/for me?

While obviously not covered by personal accident insurance, you can purchase a business accident insurance policy, which will cover a couple of key employees or business partners. This is particularly important if you and the business rely on this individual for financial stability and a healthy income, whether they’re your business partner or someone you employ.