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Contractor Accident and Sickness Insurance

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Contractor accident and sickness insurance

Are you a self-employed Contractor?  If so,  we strongly advise that you consider a tailored accident and sickness insurance policy to provide essential fall-back financial support should you be unable to work.

 In brief, contractor sickness insurance could offer you a strong financial lifeline.

It’s true that nobody wants to anticipate getting ill or developing a serious health issue. Of course, none of us plan to have an accident, either. Without a doubt, not being able to work doesn’t feature on our To Do list.

However, these things can happen. And, they do happen.

Yes, they could happen to you.  In our opinion, unless you can draw on several months’ savings, an accident and sickness insurance policy is essential.

Black Lion Insurance: Specialist financial advice for contractors

Black Lion Insurance offers holistic, whole of market advice to contractors.  We work on a daily basis to help support the needs of busy people like you.  Besides, you work hard.  That rainy day?  Well, it may never come but as we’ve said – it could arrive at your doorstep, maybe one day. 

Because we work with all the major insurance providers, contractor sickness insurance is a subject we understand very well indeed.  Therefore, we think that we can recommend as near perfect a policy for your circumstances as possible, based on the information you give us.

Although existing health conditions may not be covered, a robust accident and sickness insurance policy will protect up to 70% of your gross income.  Generally, it’s paid monthly and can be either short or long-term.  Also, ask us about Executive Income Protection, a specialist cover that protects up to 80% of your gross income.

Pluses and Minuses of being a Contractor

On the whole, your client (or clients) will pay more for the expertise of independent contractors such as yourself.  As a rule, your earnings are higher than being in full-time employment.  

After all, not only do they benefit from your skills, your client doesn’t fund the numerous costs that come with direct employment.  Usually, for tax reasons, you are most likely working through your limited company, so that’s all good.

Likewise, not having a boss is ace. 

So far so excellent.  But…

Firstly, there’s no sick pay.

Secondly, and more importantly, if develop a serious illness, or get injured in an accident, your income would stop immediately.

We’re here for you

In this case, the solution lies with the contractor insurance specialists at Black Lion.  We can offer you our best-in-class advice with your lifestyle in mind.  Indeed, with a range of cover options to suit your needs, we are confident that our advice will enable you to choose the best one for you and your family.

Contractor accident and sickness insurance from Black Lion

The application process is easy.

To start, we’ll talk through your income, working circumstances, current conditions – if any.  In addition, we’ll discuss your general state of health.  We’re here to offer you the benefit of our experience.  Black Lion Insurance works hard to pass on our knowledge to busy people like you.  

And, we’ll take care of all the paperwork, too.

If you need to make a claim, we’ll guide you through the process with the insurer.  With no deferment period your pay out will start immediately.  What’s more, with a long-term plan you may be able to receive payments until you reach retirement age if you are still unable to work.

Not sure what you need?

No problem.  Discuss it with us.  We’re here to help and we’ll advise you on everything you need to know.

The team here is waiting to hear from you.

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Why should I take out a contractor accident and sickness insurance policy?

In the first place, unlike people in a full-time job, if you run your own business you do not receive the same level of sickness protection. Basically, there’s no statutory sick pay if you get ill or you’re seriously injured in an accident. 

However, you can apply for Employment and Support Allowance (ESA).  On the other hand,  you may find the ESA application process to be a bit of a hassle.  In reality, it’s quite a long-drawn out procedure.  You have to meet certain criteria, for one thing.  And, there are no guarantees that you’ll be successful.  Finally, there’s a maximum pay out of £110.75 per week. 

In other words, if you need a cast-iron guarantee of financial security,  ESA may not be the best choice.    

So, what’s the solution?  All things considered, if you’re a self-employed business owner, we think that a private insurance policy will offer you the best protection. 

What does contractor sickness insurance cover?

Ultimately, self-employed accident and sickness insurance covers all illnesses that stop you from doing your job.  For example, cancer, heart disease, stress and injury, including back-related disorders.  Usually, up to 65% of your gross income can be protected. 

Essentially, it’s all quite straightforward.  You will receive a monthly income to cover expenses and outgoings like rent or mortgage, bills and groceries.

Also, there are also some business-related expenses that your insurance policy can cover.  For example, replacement staff.

What are the different types cover?

For sole traders:

In essence, if you take out a self-employed income protection plan as a sole trader, you will be taking out a personal plan. .

Generally, this covers up to 65% of your gross income.  Moreover, it’s exempt from income tax and NI.  It’s important to know that your monthly benefit is based on your personal earnings and not the revenue that your business takes. 

To make life easier, your insurance will be paid into your personal bank account..

Another key point to note is that you cannot claim any business expenses as part of your policy.

For limited company directors or contractors:

In brief, if you are the director of a limited company, you have 2 choices when it comes to your self-employed income protection policy. You can either:

Take out a personal plan, like for sole-traders, covering up to 65% of your gross income. Or:

Choose a Director Income Protection Plan.

The latter is paid by your business and covers up to 80% of gross income and company dividends.  In a nutshell, your insurer pays the monthly benefit directly to your business.  Then, the business pays you.  Therefore, this option is taxable and subject to national insurance. 

Also, bear in mind that there are various insurance policy options that you will need to decide on. Read our income insurance protection options section for clarification.

What is ‘own occupation’ income protection insurance and why is it important?

In this case, we strongly recommend that policy holders take out a policy that uses own occupation policy definition.  In a nutshell, this category ensures that your insurance provider will pay out for any medical reason that prevents you from carrying out your own occupation – rather than any occupation.

Essentially, there are other definitions that may not pay out if they believe you could still work. Just not your work.  For example, if you’re a dentist who harms his or her back, without own occupation cover you could still be obliged to secure a full-time desk job.

So, own occupation is has to be! 

How does a contractor accident and sickness insurance policy work?

You develop and injury illness that means you are unable to work.

You contact your insurer to make a claim. You will need to complete the necessary forms as well as provide a letter from your GP or medical professional.

As soon as your deferred period ends, you will receive your monthly insurance income, made payable either to your personal or business bank account, depending on your chosen policy.

You will continue to receive your income in accordance to your policy and can claim until your policy expires or you reach retirement age.

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About Us

We are a dedicated team of financial advisers, with years of experience in guiding our clients to a solution that meets their specific needs. We specialise in helping both employed and self employed individuals, as well as business owners on a variety of solutions, which range from life insurance, income protection insurance, keyman insurance and shareholder protection insurance.

The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

Black Lion Insurance & Black Lion Wealth are a Trading Style of PRG Protect Ltd

PRG Protect Ltd: Registered in England & Wales, No. 08286239.  Registered Office: 51 The Parade, Cardiff, South Glamorgan, Wales, CF24 3AB