Personal Accident Cover: What Happens If You Can't Work?

‍‌‌​​‌​​‌​‌‌‌​​‌​‌‌‌​‌​​‌​​​‌‌‌​‍SiteKiln gives you plain-English information, not personal insurance, financial or legal advice. If you need advice specific to your situation, talk to a qualified financial adviser or insurance broker.

6.6.1 The short version

Personal accident and income protection cover are there to put money in your account if you cannot work because you are injured or ill. For self-employed trades, that is your sick pay -- because the business stops paying you the minute you stop turning up.

Some policies pay a lump sum for serious injuries or death (classic "personal accident"), others pay a weekly or monthly income for as long as you are signed off (short-term accident/sickness or full income protection). None of this is legally required -- it is about whether you and your family could keep up the mortgage, rent and bills if you were out for months.

6.6.2 Why it matters

If you are PAYE on a big job, you might get sick pay. When you are self-employed, you are the HR department -- if you are not earning, no one quietly keeps paying you. Government support like ESA is limited -- typical weekly amounts are nowhere near most mortgages and household bills.

Realistic scenario: you fall, bust your knee or back and you are off work for six months. Without cover, you burn through savings, borrow on cards, fall behind on bills and watch the business wither. With the right policy, you at least have a predictable payment landing every week or month so you can focus on getting fit again.

6.6.3 What "personal accident" actually covers

Trade-focused personal accident policies are usually built around accidents, not sickness.

Depending on the insurer, they may offer:

• A tax-free lump sum if you suffer a listed serious injury (loss of limb, loss of sight, permanent total disablement, accidental death).
• A weekly benefit if you are temporarily unable to work due to an accident (for example up to £250-£500 per week for up to 52 weeks).
• Cover 24/7, or just while you are carrying out your trade, depending on the policy.

They typically do not cover:

• Illness that is not accident-related, unless you buy a wider accident & sickness add-on.
• Pre-existing conditions or injuries you already had when you took the policy out.
• Self-inflicted injuries, drink/drugs-related accidents, or reckless behaviour.

Think of it as "if I get smashed up in an accident, this pays a lump or a weekly amount while I mend".

6.6.4 What "income protection" adds

Income protection is more like a long-term sick pay policy -- it is broader and usually more flexible.

Typical features:

• Pays a monthly, tax-free income if you cannot work because of accident or illness, often up to 50-70% of your usual pre-tax earnings.
• Runs for as long as you are signed off within the policy terms -- e.g. 1, 2 or 5 years per claim, or up to a set age.
• Lets you pick a "deferred period" (how long you wait before payments start -- e.g. 4, 8, 13 or 26 weeks) to match your savings or sick-pay buffer.

Key thing to watch is the definition of incapacity:

• "Own occupation" -- pays if you cannot do your own job as a bricklayer, roofer, etc.
• "Suited" or "any" occupation -- may only pay if you cannot do any job at all, which is harder to claim on but cheaper.

For most trades, "own occupation" is what you really want -- you do not want an insurer arguing you could stack shelves so you do not get paid.

6.6.5 How this fits with self-employed reality

For a self-employed builder or trade, the usual mix looks like:

• Short-term accident/illness cover or personal accident -- to get you through a broken leg, shoulder surgery, a few months out.
• Longer-term income protection -- to handle big health events where you are out for a year or more.

Things insurers and advisers tend to ask for:

• Proof of your recent income (accounts, SA302s, or director salary/dividend mix).
• Your trade and risk level (roofing and scaffolding are priced differently to office-based roles).
• Smoking status, health, age and how long you want cover to run.

You do not have to cover 100% of your income. Many self-employed people pick a level that keeps the home and business afloat -- typically the core bills plus basics -- and rely on savings for the rest.

6.6.6 Common exclusions and traps

Stuff that often catches trades out:

• "Accident-only" policies that do not pay for illness (for example cancer, heart issues, serious back problems that are not a one-off accident).
• Low weekly or monthly limits that would not touch your actual household bills.
• Short benefit periods (e.g. 12 months max) when you think you are covered until you are back on your feet, however long that takes.
• Long deferred periods -- e.g. 13 or 26 weeks -- when you have no savings to bridge the gap.
• Not updating the cover amount as your income goes up, leaving you under-insured.

Also watch for:

• Exclusions on high-risk hobbies (motorsport, certain climbing, etc.).
• Restrictions linked to working at height or on certain kinds of sites -- check the wording if you do high-risk work.

6.6.7 Quick personal accident / income protection health check

You are in a stronger position if you can answer "yes" to most of these:

If you were off work for 3 months from tomorrow, do you know exactly where the money would come from -- savings, partner's income, a policy -- and is it enough?

Do you have at least one policy (personal accident, accident & sickness or income protection) that would pay you directly if you are signed off?

Does the benefit level actually match your real core outgoings, not just a token £50-£100 a week?

If you have income protection, is it "own occupation" and do you understand the deferred period and maximum claim length?

Have you checked the exclusions for illness vs accident, and any height/trade/hobby limits, in the last year?

If there is a "no" there, that is something to look at before the injury, not after it.

6.6.8 What to do next

• Work out your core monthly outgoings (mortgage/rent, bills, food, vehicle) -- that is the minimum your cover should match.
• Check whether you have any cover at all right now -- personal accident, accident and sickness, or income protection.
• If you have income protection, check whether it is "own occupation" and what the deferred period and maximum claim length are.
• If you have nothing, get at least one quote for short-term accident and sickness cover as a starting point.

6.6.9 Who to contact

• Your insurance broker or financial adviser -- to review personal accident and income protection options (paid)
• FCA Financial Services Register -- fca.org.uk/firms/financial-services-register -- to check your adviser or broker is authorised (free)
• Financial Ombudsman Service -- 0800 023 4567, financial-ombudsman.org.uk -- if you have a complaint about your insurer (free)
• ABI (Association of British Insurers) -- abi.org.uk -- general insurance guidance (free)
• Citizens Advice -- citizensadvice.org.uk -- for general guidance on benefits and rights if you cannot work (free)

6.6.10 Sources and legislation

• Employers' Liability (Compulsory Insurance) Act 1969 -- context: EL covers employees, not you as the self-employed owner. legislation.gov.uk/ukpga/1969/57
• Consumer Insurance (Disclosure and Representations) Act 2012 -- your disclosure duties when arranging cover. legislation.gov.uk/ukpga/2012/6
• Social Security Contributions and Benefits Act 1992 -- ESA and statutory sick pay provisions. legislation.gov.uk/ukpga/1992/4

6.6.11 Related guides on this site

• 6.1 Public liability insurance
• 6.2 Employers' liability insurance
• 6.9 Making an insurance claim
• 5.9 National Insurance gaps
• 5.10 Pension auto-enrolment
• S9 Setting up as a sole trader -- step by step

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