What is personal accident insurance?

Employers’ liability (EL) insurance and personal accident insurance both deal with the impact of work-related injuries but they are quite different types of cover.

EL is there to help protect you and your business if an employee is injured or falls ill in relation to their work and claims for compensation. Businesses are legally responsible for the safety of their staff. So, if you have employees, it’s likely you’re legally required to purchase EL insurance. If you’re found to be without insurance when you should have it, you could be fined £2,500 every day you’re without cover [1].

Personal accident insurance provides financial support should you or one of your team be injured in an accident. It’s not related to court cases or compensation payments. Instead, it helps to cover the costs of lost wages, medical rehabilitation and even retraining until you’re able to work again. 

Another crucial difference is that personal accident insurance provides cover for accidents that happen outside of work as well as in work. But unlike EL, it generally doesn’t cover illnesses. 

Income protection and personal accident insurance have much in common, but there are key differences to note.  

Income protection can help to protect your wages if you’re unable to work due to a long-term illness. On the other hand, personal accident insurance can protect your wages if you can’t work or run your business because of an accident. But illnesses aren’t always covered with personal accident, even if the leading cause of an illness was your job.

Before you can take out income protection, you’ll likely be required to provide details about your health, your habits and even your hobbies [2]. Because so many things can affect your general health, income protection policies are usually only applicable to the person taking out the cover. As such, individual policies can’t be applied to other staff members. Personal accident insurance is different. It can cover you as an individual or multiple members of your team, should you choose to add them to your insured list.  This is known as group personal accident insurance.

If you’re self-employed, both income protection and personal accident insurance could prove useful. If you fall ill or injure yourself, for example, you won’t have sick pay from an employer to support you through any periods where you’re unable to work [3]. So, while income protection and personal accident insurance have crucial differences, both can help protect you and your income from things beyond your control.

Though the chances of an accident happening in an office may feel lower compared to those who work in a trade or on an industrial site like a factory or manufacturing plant, you can’t rule them out entirely. Of course, it’s the responsibility of an employer to conduct a health and safety risk assessment under the Management of Health and Safety at Work Regulations 1999 (external link). However, wet floors and other everyday hazards can be found in almost every workspace, regardless of profession or environment, and accidents can happen anywhere.

Personal accident insurance can also cover staff members for injuries that occur outside of work. So, if a key member of your sales team breaks their leg playing football or trips on the stairs leading up to their flat and is unable to work you can get some financial support.  

So, while you might assume clerical staff are less at risk of injuring themselves compared to other industries or roles, personal accident insurance could still be worthwhile.

Yes, it’s possible to get personal accident insurance if you’re self-employed. After all, you won’t have the support of a company if you’re injured in an accident. Because of this, people who are self-employed consider the level of cover they opt for to ensure it’s sufficient for their circumstances.  

If you’re a sole trader, personal accident insurance can help to provide you with an income while you recuperate, even if your business is temporarily inactive. Your cover could help you with the cost of lost earnings, as well as other business expenses.

Disclaimer:

Our FAQ pages provide general information and background around the topic covered. FAQ pages are reviewed and monitored periodically by our insurance experts. But the content is not intended to be read as advice and any material is for general information purposes only. If you would like advice for any content, please seek professional assistance.