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Is Personal Accident Insurance A Legal Requirement?

By Darragh Timlin on April 1st, 2022

Starting a business has never been something for the faint hearted. It requires dedication, effort and commitment, as well as an excellent eye for detail and brilliant organisational and management skills. There is so much to consider, and it is for this reason that many business owners overlook their businesses’ insurance cover. It can seem like a daunting prospect, especially when there is so much legislation surrounding insurance.

What’s more, there are so many different types of insurance cover to choose from that it can feel overwhelming. Fortunately, it is not as complicated as it seems, and it’s worthwhile considering how your insurance will protect you and your business against unforeseen and disastrous circumstances. In this guide, we’re going to explain everything you should know about personal accident insurance, why it is so important and what is required.

  1. What Businesses Need Personal Accident Insurance?
  2. What Is The Law?
  3. What If I Don’t Have Personal Accident Insurance?
  4. How Personal Accident Insurance Protects Your Business

What Businesses Need Personal Accident Insurance?

Risk is an inherent part of life, and owning a business is no exception. There will also be an element of risk associated with doing any type of work for a business, regardless of whether you are the owner or an employee. Of course, the extent of this risk will depend on the specific industry that you are in. Construction, for example, is regarded as high risk from an insurance perspective because of the increased likelihood of the workplace conditions causing injury and illness.

However, personal accident insurance is recommended for every business, and it will protect yourself and your employees in the event of an accidental injury. Owning a business is a wonderful way to establish autonomy and independence, but there is a significant responsibility for the welfare of yourself and others. With personal accident insurance, anyone who cannot work because of an accident will be provided with a sum of money.

For small businesses, the impact of you or an employee not working can be substantial. Personal accident insurance, therefore, will provide a financial cushion for your business and keep it afloat until the injured party can return to work or alternative arrangements are made. So, if you own a business and employ staff, personal accident insurance is highly recommended.

What Is The Law?

Within the United Kingdom, there is only one insurance policy that is legally required – and that is employers liability insurance. This insurance will protect your business in the event that an employee suffers from an illness or injury, and makes a claim for compensation against your business. Employers liability insurance will cover legal costs that are associated with this claim, and will also cover compensation costs that you may be required to pay out. The penalty for not obtaining this insurance is significant, and you may be fined £2,500 for each day that you are not protected.

Although employers liability insurance is the only insurance policy that is mandated by law, most business owners will invest in other policies that will protect them from the various risks and liabilities that are associated with owning a business. Personal accident insurance may not be legally required, but reporting any accidents that happen at your workplace is. According to The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013, businesses are legally required to document any accidents that occur in the workplace.

Injuries and illnesses within and outside work cannot always be avoided, and as a business owner it is essential that you are thoroughly prepared for every eventuality. Abiding by health and safety standards should be one of your foremost priorities, and this infographic from HSE offers detailed statistics, information and insights into health and safety within the United Kingdom.

Even seemingly minor injuries and illnesses should be carefully documented, not only to abide by the government’s health and safety requirements but also to prevent any incidents from happening in the future. If you are not covered by a comprehensive insurance policy then your business will be expected to bear the financial burden.

This could be devastating for a small business, and proper documentation will ensure that responsibility is duly established and that the appropriate measures are taken. When it comes to personal accident insurance, having a record of everything that happened will be an invaluable resource when it comes to ensuring you, your employees and your business have all of the necessary evidence to receive the compensation that you need.

What If I Don’t Have Personal Accident Insurance?

Sometimes, accidental injuries cannot be avoided no matter how meticulous you are. If you want to be as prepared as possible for the unexpected, then incorporating personal accident insurance into your policy is definitely recommended. If you have a small business or you are a sole trader, then absorbing the impact of an unexpected injury can be incredibly difficult, if not impossible. You should carefully consider whether your business could continue to survive if you or a member of your team were to be away for long periods of time or indefinitely.

Moreover, personal accident insurance can be a lifeline if your business couldn’t otherwise afford to provide wages or rehabilitation. In the unfortunate event that the injuries are permanent, then personal accident insurance can contribute to medical expenses as well as those associated with retraining and recruiting. In instances of permanent disability and death, the policy will pay out a lump sum. If your business relies on your ability to work, or that of a particular person, then personal accident insurance should definitely be considered. Without this policy, there is the risk that an accident could have a debilitating impact on the long-term survival of your business.

How Personal Accident Insurance Protects Your Business

In contrast to employers’ liability insurance, personal accident insurance will protect yourself and your employees from any of the costs associated with temporary or permanent injuries caused by accidents, even when those accident didn’t happen in the workplace. For example, if you were to sustain an injury whilst at home, and it ended up impacting your ability to work, then you will receive regular payments until you can return. Depending on the extent of protection, your policy may also contribute to the cost of any rehabilitation that will ensure you can begin working as quickly as possible.

If your business relies on a particular role to function, then you should invest in personal accident insurance straight away. It is not possible to predict the unexpected, but you can be prepared for any uncertainties before they have happened. Suffering from an injury is a painful and difficult experience, sometimes with a long road to recovery. The last thing that should be on your mind, therefore, is whether your business will survive or how you will compensate for the loss in income or afford medical expenses.

Personal accident insurance will provide you with the security and comfort you need to focus on what ultimately matters, which is your health. Are you starting a new venture? Let us assist you in understanding the essential business insurance requirements for your industry.

Darragh Timlin

With over 25 years’ experience, Darragh is an expert in all things insurance. Starting his career in commercial property underwriting, Darragh has worked for a number of global insurers and is now Managing Director of Brisco Business, part of the wider Henry Seymour Group.

All articles by Darragh Timlin

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