Who workers compensation actually covers
Workers compensation rules differ by state, and whether a working director, a family member or a contractor is covered can be unclear. Finding out after an injury is the hardest time to learn it.
Personal accident and illness insurance
Income protection style cover for business owners if you can't work because of injury or illness, on or off the job.
The short answer
What is personal accident and illness insurance?
Personal accident and illness insurance pays a weekly benefit if you can't work because of injury or illness, and usually lump sums for serious injuries. It matters for sole traders and many working directors because workers compensation generally covers employees, not the business owner, so an injury can stop your income completely.
What does personal accident and illness insurance usually cover?
Every policy is different, so the wording always decides. These are the typical inclusions and exclusions.
Usually covered
- A weekly benefit, usually a percentage of your income, while you can't work due to injury or illness
- Lump sums for serious injuries, such as loss of limbs or sight, depending on the policy
- Cover 24 hours a day on many policies, not only while working
- Some policies include benefits for hospital stays or rehabilitation
Usually not covered
- Pre-existing conditions, usually for a period of time
- A waiting period, often 7 or 14 days, before weekly benefits start
- Benefits beyond the maximum period, often up to 52 or 104 weeks
- Injuries from excluded activities, which vary by policy
Who uses personal accident and illness insurance?
Sole traders, partners and working directors in trades, construction and transport, where a back injury, broken wrist or illness can mean weeks without income. Owners often assume their business insurance covers them, and only find out otherwise after an injury.
What do clients and sites ask for?
Some head contractors ask subcontractors who aren't covered by workers compensation to show personal accident cover before they come on site, so an injured subcontractor has their own cover.
When it gets harder
When does personal accident and illness insurance get more complicated?
Higher-risk occupations
Roofers, scaffolders, demolition workers and some transport operators may face higher premiums or restrictions.
Cost
What affects the cost of personal accident and illness insurance?
| Factor | Why it matters |
|---|---|
| Occupation | Physical and higher-risk work costs more than office-based work. |
| Benefit amount | The weekly benefit you choose, usually based on your income. |
| Waiting and benefit periods | A longer waiting period lowers the premium; a longer benefit period raises it. |
| Age and health | Older applicants and pre-existing conditions affect pricing and terms. |
Common questions
Questions about personal accident and illness insurance
Am I covered by workers comp if I'm a sole trader?
Generally not for your own injuries. Workers compensation is designed to cover employees, and sole traders are usually not employees of their own business. The rules vary by state, especially for working directors and contractors, so it is worth checking with your state scheme.
Is personal accident the same as income protection?
They are similar. Personal accident and illness is a general insurance product, usually renewed every year and with shorter benefit periods. Income protection is a life insurance product with longer benefit periods, often sold through a financial adviser.
Does personal accident cover injuries outside work?
Many policies provide 24-hour cover, so injuries outside work are included. Some policies only cover work hours, so check the wording.
Personal accident and illness by trade
How personal accident and illness insurance applies to specific kinds of work.
- Electricians
- Plumbers
- Carpenters
- Roofers
- Scaffolders
- Painters
- Handymen
- Plant operators
- Truck operators
- Couriers and fleets
- Security businesses
Other types of insurance
This page is general information only. It does not take into account your objectives, financial situation or needs, and it is not a recommendation to buy any insurance product. Always read the policy wording and, where applicable, the Product Disclosure Statement.
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