Have you ever considered what you would do if you were involved in an accident or sustained an injury that rendered you unable to work? Here’s a rundown of everything you need to know about personal accident insurance coverage in the UK.
What is Personal Accident Insurance?
Personal accident (PA) insurance can provide you with cash compensation in the event of death or bodily injury as a result of an accident in the UK. You can include it in your commercial insurance coverage.
What Constitutes an Accident?
The Financial Ombudsman defines an accident as “an unanticipated or unexpected and regrettable incident.”
It’s vital to realise that this form of personal insurance will not kick in if you become incapacitated due to natural factors such as disease or sickness. To protect yourself against certain eventualities, you’ll need to obtain additional coverage, like a critical illness policy.
Do I Need Personal Accident Insurance Cover?
Accidental injuries are unforeseen accidents that even the most cautious business owner cannot anticipate. Nobody knows what’s around the corner. You could be injured after stumbling overstock, or the incident could happen outside of work. Your finest employee could be hospitalised following an accident on the street. To prepare for the unknown, prudent business owners have a personal accident insurance policy in place.
Accident insurance is especially crucial for small firms and lone proprietors because it can be more difficult to absorb unforeseen repercussions. If the company couldn’t function without you or other key team members, personal accident coverage is a must-have.
Similarly, this form of cover can assist enterprises that would otherwise be unable to pay for wages or rehabilitation expenditures. If other people rely on your capacity to work or if the viability of your firm depends on it, you need personal accident coverage.
What Does Personal Accident Insurance Cover In The UK?
Personal accident insurance coverage protects you and other insured employees against the costs of temporary or permanent injuries caused by accidents, even if the events are unrelated to your job.
This means that if you are injured while playing sports and are unable to work for more than two weeks as a result, you can be paid weekly until you are able to return. You’ll also be assisted with the cost of rehabilitation to help you get back on your feet. Nobody wants an accident to happen, but the financial assistance given by personal injury coverage helps keep your business afloat.
Permanent injuries can have a significant financial impact on small enterprises. Fortunately, key person insurance can offer some assistance. If a person loses their hearing or the use of a limb, this sort of coverage offers a flat payment to relieve the stress.
Certain sorts of labour, such as construction, carpentry, or hairdressing, may no longer be available as a result of certain injuries. Personal accident insurance can also help you or a member of your team cover retraining in a new line of work. Personal accident insurance may be an important sort of insurance for your small business.
When should I consider when purchasing Personal Accident Insurance in the UK?
If your company relies on key people and positions to function, you should purchase personal accident insurance coverage right once to safeguard it from disruption and financial pressure. The unexpected cannot be predicted, but it may be prepared for by purchasing this form of company insurance. If the worst happens, we’ll try to lessen the shock and relieve the strain on you and them.
If you’re just starting out, it’s a good idea to get individual personal accident insurance as soon as you start making money on which you, a partner, or any dependents rely.
How much Personal Accident Cover will I require?
You can choose any figure between £5,000 and £100,000 for your personal accident cover. The amount you choose determines how much you’ll be paid in a lump sum if someone is permanently wounded in an accident and is unable to work as a result. Therefore, the best value for you is determined by the type of your business.
The amount of interruption you anticipate if you or your staff are unable to perform their duties determines the amount of personal accident coverage you need. Consider how much financial assistance you believe you will require to help your firm through those times.
Types of Personal Accident Insurance Policies?
There are various types of personal accident insurance coverage, so ensuring you have the proper policy is critical. The following are the most common types:
#1. Accidental death insurance
This type of policy ensures that your partner or family will be financially supported if you die in a tragic accident. This is typically paid in a single lump sum.
#2. Accidental permanent injury insurance
If you suffer a permanent injury, such as the loss of a limb, vision, or hearing loss, or become incapacitated, this coverage will reimburse you.
#3. Personal accident plans for families
You may also expand your coverage to encompass your entire family, which is useful if you have adult children who may require this type of insurance.
What kinds of mishaps are covered?
Personal accident coverage protects you if you get a very serious injury; it does not typically pay out for minor breaks or sprains. In general, when you purchase personal accident insurance, you will be protected against the following:
- Blindness in one or both eyes for the rest of your life
- Loss of any limbs, if they must be amputated
- Being unable to use any of your limbs, for example, due to paralysis
- Total immobility
- Death
However, not all insurers are the same; while any decent personal accident cover policy will cover all of the above, some may also include any of the following:
- Hearing loss in one or both ears
- Finger or toe amputation
- Speech impediment
- Burning damage
- Scarring
What isn’t included?
Personal accident coverage, on the other hand, does not always pay. Minor injuries and sprains aren’t normally covered, and it may be difficult to acquire a lump payment for psychological stress. Most importantly, you will not be insured if you have not followed important safety procedures.
If you are injured in an accident and were not wearing your seatbelt, you are unlikely to receive compensation. Similarly, insurers will not compensate you if you have been driving while under the influence of drugs or alcohol. And if it is discovered that you intentionally hurt yourself, your insurance will be voided.
What is the Cost of a Personal Accident Car Insurance Cover in the UK?
In many circumstances, the cost of personal accident insurance coverage is already included in your car insurance policy. However, it is not prohibitively expensive – often an extra £20 or £30 per year (although prices are a little higher for motorcyclists).
Keep in mind that being in a catastrophic accident might result in some substantial bills. Thus, while it’s a bit less money in your pocket, the increased protection is definitely worth it.
How much money does it give out?
Payouts for personal accident coverage are frequently weighted depending on the severity of your injuries. A policy, for example, may not payout if you have only lost 20% of the function of a limb. It may pay you 50% of the insured amount if you lose 50% of the function of the limb, or any other percentage equivalent to the percentage of use you’ve lost, as determined by a doctor.
If your loss exceeds 70%, you will normally receive the full mamountcovered. Similarly, the assessment of sense loss is carried out. When filing a claim, you will usually be required to provide documentation of your level of disability from a medical practitioner.
What should I check for when purchasing a personal accident cover?
Every personal accident policy is unique, so when looking for coverage, make sure it suits your requirements. Consider the following:
- What exactly does it cover? Personal accident coverage will only pay out for specific injuries; each insurer has its own list.
- How much do I have insurance for? Most plans provide a lump payment of roughly £5,000, although others provide up to £100,000
- Who else is included? Many insurers will cover named drivers even if they are not the ones driving. Others will also safeguard any family members who are in the car.
- What situations are covered? You may be protected if an accident occurs while you are getting in or out of your car, or if something happens while you are waiting for help on the side of the road.
- Where do I have protection? Is your personal accident car insurance solely valid in the UK, or do you have foreign coverage as well?
Should I cover personal accident car insurance separately?
Many consumers prefer to continue with their current carrier because many insurers include personal accident coverage with their fully comprehensive car insurance or offer it as an extra add-on. However, it is worthwhile to shop around to see whether you may receive better coverage by purchasing personal accident car insurance coverage independently.
When personal accident coverage is offered as an add-on, it is sometimes less comprehensive than when purchased individually. You may be protected from fewer injuries, or you and your family members may be excluded. It’s possible that an add-on provides everything you require – but it’s never a bad idea to look into alternative options.
Is personal accident insurance deductible for tax purposes?
Because it is not essentially a company expense, personal accident insurance is not tax-deductible. Professional indemnity, public liability, and employers’ liability insurance are all tax-deductible, therefore, you can deduct the cost when computing your taxable profit.
The distinction between Personal Accident and Other Types of Insurance
Payment protection insurance (PPI) and income protection insurance are two terms that are frequently used interchangeably when referring to personal accident insurance.
#1. Payment security insurance (PPI)
PPI safeguards your payments in the event of an accident, illness, or unemployment. It provides coverage for accidents, but it is not the same as personal accident insurance.
#2. Income security
This insurance protects your income if you become ill and are unable to work. Personal accident policies provide a lump sum of money, whereas income protection policies pay a proportion of your monthly income. Insurance against critical illness
If you get a critical disease such as cancer, heart failure, or stroke, critical illness coverage will pay you a lump sum cash benefit.
What is the best place to purchase personal accident insurance?
Your IFA will be able to offer you a clearer idea of how much coverage you may require, as it will be determined by a variety of circumstances. To begin, consider your critical monthly outgoings and figure out how much coverage you would require for one, two, three, and six months.
Second, you must consider any other medical issues that may exist. Diabetes, for example, is a disorder that, in severe circumstances, necessitates amputation of a limb; this alone is unlikely to be covered, given the underlying cause is the sickness itself. However, if your diabetes leads you to have an accident at work as a result of dizziness induced by low blood sugar, and you lose a limb as a result, this is likely to be covered because an accident was a factor.
Personal Accident Insurance FAQs
What are the 2 main types of personal accident insurance policies?
Individual Personal Accident Insurance and Group Personal Accident Insurance are the two main types of personal accident insurance. Individual Personal Accident Insurance: The first category is intended for individuals and provides higher coverage than group insurance.
What is an example of accidental injury?
Accidental injuries include falls, scrapes, burns, car accidents, bites, stings, and drowning. Accidents can happen at any time, and they are a leading cause of death.
What is the difference between personal accident cover and personal injury cover?
Personal accident insurance pays you if you suffer a serious injury, die as a result of an accident, or become totally and permanently incapacitated. According to the Financial Ombudsman Service, personal injury insurance policies typically pay a defined amount of money for specific ailments, depending on the level of cover.
