Contractor at home off work due to back injury

Contractor Accident and Sickness Insurance

Providing essential protection for contractors

Black Lion - Part of Halo Consulting

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Sickness Insurance for Contractors

Are you a self-employed contractor? If so, it may be worth consider a tailored accident and sickness insurance policy which can provide essential financial support should you be unable to work. Contractor sickness insurance could offer a crucial financial lifeline. While no one plans to get ill or have an accident, these events can and do happen. Unless you have several months’ worth of savings, an accident and sickness insurance policy could provide an essential financial buffer if you are unable to work due to illness or injury.

Black Lion: Insurance specialists for contractors

Black Lion Insurance offers comprehensive insurance advice to contractors. We work daily to support the needs of busy professionals like you.

Because we work with a comprehensive selection of insurance providers, we understand contractor sickness insurance very well.

We aim to recommend the most suitable policy for your circumstances based on the information you provide. Although existing health conditions may not be covered and coverage and terms vary by policy and insurer, a robust accident and sickness insurance policy can protect up to 70% of your gross income.

Generally, it’s paid monthly and can be either short or long-term. Additionally, 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) are likely to 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. However, there are downsides: there’s no sick pay, and if you develop a serious illness or get injured in an accident, your income could stop immediately.

Contractor accident and sickness insurance from Black Lion

The contractor insurance specialists at Black Lion can offer you expert advice with your requirements in mind. With a range of cover options to suit your needs, we are confident that our advice will help you choose the most suitable policy for you and your family.

We aim to make the entire process simple and straightforward.

To start, one of our qualified consultants will discuss aspects such as your income, working circumstances, financial commitments, dependents, any current savings as well as your general state of health.

From here we will then conduct a review of the various policies available within any budget that you have provided and select those we believe are most suitable for your needs.

Our aim is to ensure that you have all the necessary information to make a well informed choice.

We offer the benefit of our experience to help busy professionals like you. We’ll take care of all the paperwork.

Once having set up a policy, if you need to make a claim, we’ll help guide you through the process with the insurer.

Following the deferment period, your monthly benefit will become payable, usually a month in arrears, although this will vary by policy and insurer. 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 can offer reliable protection.

What does contractor sickness insurance cover?

Many self-employed accident and sickness insurance policies will cover any illnesses or injuries that stop you from doing your job. For example, cancer, heart disease, stress, and physical injuries, including back-related disorders. Usually, up to 65% of your gross income can be protected. You will receive a monthly income to cover expenses and outgoings like rent or mortgage, bills, and groceries. Additionally, some business-related expenses, such as replacement staff, may sometimes be covered by an insurance policy.

What are the different types cover?

For sole traders:

For sole traders: 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 and personal plans are usually 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 generates.

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:

If you are the director of a limited company, you have two 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 you can choose a Director Income Protection Plan. The latter is paid by your business and covers up to 80% of gross income and company dividends.

Your insurer pays the monthly benefit directly to your business, and then the business pays you. Therefore, this option is taxable and subject to national insurance.

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 many cases we recommend that our clients take out a policy that uses the own occupation definition.

This category ensures that your insurance provider will pay out for any medical reason that prevents you from carrying out your specific occupation – rather than any occupation.

Other definitions may not pay out if they believe you could still work in a different capacity.

For example, if you’re a dentist who injures their back, without own occupation cover you could be required to secure a full-time desk job. Therefore, own occupation cover is highly recommended.

IT consultant at brick desk - Choosing the right income protection policy for your occupation
Policy Comparison

Accident & Sickness vs Income Protection

Answering 'What's the difference between Accident & Sickness Insurance and Income Protection?', this article looks at the key differences, compares example quotes and considers the potential suitability of both policy types for two self-employed professionals with very different occupations and personal requirements.

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.

About Us

Part of Halo Consulting, Black Lion Insurance are a dedicated team of insurance consultants 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 income protection, keyman and shareholder protection insurance.