Do NDIS Registered Providers need Personal Accident Cover?
Yes, if you are a sole trader or are otherwise not covered by Workers Compensation insurance.
The NDIS Quality and Safeguards Standards require that ‘risks to participants, workers and the provider are identified and managed’.
Part of this risk management process includes having “the appropriate insurance in place, including professional indemnity, public liability and accident insurance”.
The reference to “accident insurance”, means that if you are an NDIS Registered sole trader, a contractor or otherwise not covered by workers compensation insurance, Personal Accident or Income Replacement insurance can be required.
As a registered NDIS Service Provider, having appropriate insurance arrangements in place is a requirement that Auditors need to verify as part of your NDIS Audit Certification or Audit Verification and they will ask to see a certificate of currency for these insurances, during your NDIS Audit.
What does Personal Accident Insurance cover?
Accidents are by nature never expected. And yet they happen every day.
When business owners think about their insurance needs, they immediately think about their physical assets, such as cars, equipment and buildings. However, as a sole trader, people often miss the most important asset – themselves.
An accident or serious illness could force you to stop working for an extended period, not only leaving you without an income, but also unable to pay your ongoing expenses and overheads to keep your business running. These might include your rent, telephone, salaries and electricity.
Personal Accident and Illness insurance* can provide levels of cover for loss of income if you are unable to work, permanently disabled or even pass away as a result of an unexpected injury or illness (even if it occurs outside of your employment). It is not a one size fits all type of insurance and can be tailored to suit your personal and business needs.
Consider this: You are a sole trader who is a mobile music therapist. You fall and break your leg and can’t drive for 6 weeks. Personal Accident & Illness Insurance could provide you with a regular income whilst you are off work, offering peace of mind that you can still pay your bills and continue earning an income while you recover.
* (typically just referred to as Personal Accident Insurance)
How is Personal Accident Insurance different to Workers Compensation?
Workers Compensation Insurance is required by any business that has employees (‘workers’). It provides an employer with protection if one of their employees suffer a work-related injury or illness. The policy will insure your business against the cost of supporting your injured worker whilst they recover and will cover costs like weekly compensation, rehabilitation and medical expenses. (Workers Compensation legislation is different in each State and Territory and you should consult your local regulator to check how this applies to your business.)
Personal Accident Insurance is often taken out by sole traders. It is a form of supplementary income that helps sole traders who rely on themselves to keep a business running or to earn an income. If that individual is unable to work, there should be protection in place to ensure that the business can continue to run whilst they recover.
According to icare (NSW provider of Workers Compensation Insurance): “Sole traders/proprietors, or members of a partnership are not considered as workers. Hence, they cannot take out workers insurance to cover themselves for injuries. For sole traders and partnerships, a suitable alternative may be a personal accident and illness policy, or an income protection insurance policy.”
How does Personal Accident Insurance work?
Personal Accident Insurance can provide up to 85% of your monthly income over the time you are unable to work.
When taking out Personal Accident Insurance, you can tailor your cover to suit your business needs and affordability by choosing from a range of features.
Here are the essential features you can select from with BizCover:
- Accident cover: Accident cover responds when an injury resulting from an accident prevents you from returning to work.
- Accident and Illness cover: In addition to accident cover, Accident and Illness cover also provides protection when sickness prevents you from returning to work. Adding this may increase your premium.
- The waiting period: The waiting period (which could be considered as the ‘excess period’) is the time you would have to be off work before the policy commences paying you a benefit. This is between 7 and 28 days. The shorter the period, the higher your premium.
- Benefit Period: This is the maximum period that you could potentially receive a benefit for each individual claim. This is either 12 months or 2 years. The longer the benefit period, the higher your premium.
There is also an option to cover you for Accidental Death or Disablement. This can provide a lump sum payment to your beneficiaries if you die in an accident, or to you if you suffer a permanent disabling injury. So, if you need time off work due to an accident (or possibly sickness), you can claim on your Personal Accident Insurance following your chosen Waiting Period. Depending on the benefit period you choose, you could be covered with these payments for up to 2 years.
What is typically not covered by Personal Accident Insurance?
Like most insurances, there are exceptions where the insurance will not cover you. It’s important to know about these upfront.
As a rule of thumb, Personal Accident Insurance does not apply to injury or sickness which occurs as a result of:
- Pre-existing condition(s);
- Participating in professional sports or hazardous activities;
- Pregnancy and childbirth;
- Acts which are intentional, criminal or otherwise deliberately caused by you;
- Being under the influence of alcohol or drugs;
- Acts of war and terrorism.
How much does Personal Accident Insurance cost?
Like all other insurance, the cost of the policy depends on several factors.
For Personal Accident Insurance, the factors that impact on your premium are a combination of things which you can choose (like sum of insurance, waiting period, type of cover) and factors specific to your situation like your age, occupation or role.
Before you request a quote for Personal Accident Insurance, be aware of the factors impacting the cost of your Personal Accident Insurance policy:
- Age – The older you are, the greater your risk of accidental injury and the longer you may take to recover. Therefore, the cost generally increases with age.
- Your occupation or role – People in higher-risk occupations generally pay more for cover. For example, an office worker may be able to continue work with a broken leg, whereas an NDIS Service Provider who must regularly assist with moving a person with a disability, would not be able to return to work with this same injury.
- The Sum Insured amount – The higher the amount you are eligible to receive, the more you will have to pay for cover.
- The type of cover –Accident only or Accident and Sickness cover is available. Including sickness cover will result in an increase to the cost of the policy.
- The Benefit Period – Longer benefit periods attract higher insurance premiums.
- The Waiting Period – The shorter the waiting period, the higher the cost of the insurance. This is similar to the excess on a motor vehicle policy – generally speaking, the lower your excess, the higher your premium.
How can I get Personal Accident Insurance?
Bizcover is MyCareSpace’s preferred insurance partner. As a small business owner, regardless of how your business is incorporated as a sole trader, independent contractor, partnership or company, if your livelihood will be impacted by an accident, then its good business practice to consider buying Personal Accident Insurance.
Tips when Applying for Personal Accident Insurance
Before you apply for Personal Accident Insurance, take some time to think about your specific needs. You will be asked various questions that will help tailor a policy suited to your personal circumstances.
Having the answers to the questions below, on hand will make your application process quicker and easier.
Have answers ready for these questions when you apply:
- What are your current weekly earnings?
- How much money would you need on a weekly basis to meet your day to day living expenses if unable to work?
- Do you want to be covered for ‘Accident Only’ or ‘Accident and Sickness’?
- Do you also want to be insured for ‘Accidental Death & Disability’? If so, how much money would you or your family need if you were disabled or died in an accident?
- What benefit period do you require? Do you want the money paid to you for up to 12 months or up to two years?
- How long can you afford to wait before payments begin (Waiting Period) – the options are 7, 14, 21 or 28 days?
**As with any insurance, cover is subject to the terms, conditions and exclusions contained in your policy document. The information on this webpage is general only and should not be relied upon as advice.