Broker-arranged
Personal accident insurance
Personal accident insurance pays you a weekly benefit, or a lump sum, if an injury stops you working. It matters most for sole traders and partners, who aren’t covered by workers compensation. Here’s what it covers, how it differs from income protection, and how a licensed broker arranges it.
- For sole traders, partners and contractors
- Weekly benefits and lump sums explained
- One short form, then a licensed broker takes it from there
What is personal accident insurance?
Personal accident insurance pays a benefit if you’re injured and can’t work. Most policies pay a weekly amount for a set period while you recover, and a lump sum for serious outcomes such as the loss of a limb or your sight. Some policies add sickness cover as an option. It’s a general insurance policy, so it’s usually arranged for a year at a time and can be set up quickly.
Workers compensation only covers employees. The Small Business Development Corporation in WA puts it plainly: if you are a sole trader or partner you are not covered by workers’ compensation insurance. Personal accident cover is the policy that fills that gap.
Personal accident, income protection and workers compensation
Three covers deal with not being able to work, and they’re often confused.
| Cover | Who it’s for | What it pays | How long |
|---|---|---|---|
| Personal accident | Sole traders, partners, contractors and anyone workers comp doesn’t cover | A weekly benefit after an injury, usually a percentage of your income up to a limit, plus lump sums for serious injuries | A set benefit period, commonly one or two years |
| Income protection | Anyone who relies on their earnings, employed or self-employed | Moneysmart says it generally pays up to 75% of your income, with some policies paying up to 90% for the first six months | Moneysmart lists benefit periods of two years, five years or up to age 65 |
| Workers compensation | Employees only | Wages and medical costs set by the state scheme | Set by the scheme |
Income protection is a life insurance product, so it involves health questions and can take longer to set up. Personal accident is a general insurance product and is usually the quicker option for an injury-only need.
What’s usually covered, and what isn’t
Usually covered
- Injury at work or outside it, depending on whether you choose 24-hour or working-hours cover.
- A weekly benefit after a waiting period, for the benefit period you choose.
- Lump sums for death and listed permanent injuries.
- Sickness, if you add the option.
Usually not covered
- Pre-existing conditions, in most policies.
- Injuries from excluded activities, such as some sports or work the policy doesn’t rate.
- Your business overheads. Some policies add them as an option.
- Your employees. They’re covered by workers compensation.
What changes the price
No prices on this page. A broker will show you the options side by side.
How to get personal accident cover through us
Personal accident insurance questions
Do sole traders need personal accident insurance?
Sole traders and partners aren’t covered by workers compensation, so if an injury stops you working there’s no scheme to pay you. Personal accident cover, or income protection, is how you replace that income.
Is personal accident insurance the same as income protection?
No. Personal accident is a general insurance policy with a set benefit period, usually injury-only. Income protection is a life insurance product that covers illness as well, with longer benefit periods. Moneysmart’s guide explains income protection in detail.
Can I get personal accident cover if I work on a site?
Yes. Some head contractors ask subcontractors to hold it, so you’re covered without relying on their workers compensation. Tell the broker who you work for.
How much can I insure?
Benefits are usually set as a percentage of your earnings up to a weekly limit. Insurers ask for proof of income if you claim, so insure a realistic figure.
Why is personal accident insurance arranged by a broker?
Insurers rate it on your occupation, your earnings and the benefit you choose, so a licensed broker arranges suitable cover rather than an online quote.
Keep reading
More broker-arranged cover
Sources
Sole traders and partners