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Cover Overview: Group Personal Accident Insurance

Most people think that personal accident insurance is only purchased by individuals through their personal lines policies, but businesses can also benefit from buying personal accident insurance.

Group personal accident policies can be purchased by employers as a benefit for employees and their dependents. They can also be purchased to protect against the financial effects of losing the services of an employee. The insurance can be used to help the company recruit or train new staff while an employee recovers from a covered injury, or it can help pay ongoing wages to an injured employee.

The Cover

Group personal accident insurance provides cover if an insured employee is injured or killed in an accident, regardless of whether it happens at work. Compensation typically occurs in the following ways:

  • Lump sums: for death or specified injuries
  • Weekly benefits: for temporary disablement that precludes the insured from working, typically  for up to 104 weeks
  • An annuity: for permanent total disablement, an annual payment normally paid out over 10 years

If you purchase group personal accident insurance as a benefit for your business, it is meant to keep your business afloat by supporting ongoing salaries, paying for temporary replacements and—sometimes—covering medical expenses.

Insurers generally write group personal accident policies on an annual basis and offer them as an extension of an existing policy rather than as stand-alone insurance. Remember to read the policy wording, since some insurers only offer standard policies that exclude illness and only cover accidents.

The insured’s profession is one of the main driving factors in calculating the policy’s premium. Occupations are typically grouped into several different premium tiers for each category according to their level of risk. If you work in a high-risk industry, your premiums will be more expensive. But higher premiums usually mean more cover in the event of an insurable contingency.

The most common contingencies covered by group personal accident insurance are:

  • Death
  • Total loss of sight in one or both eyes
  • Total loss of, or loss of use of, one or both arms or legs
  • Permanent total disablement
  • Permanent partial disablement
  • Temporary total disablement
  • Temporary partial disablement
  • Medical expenses

Sirelark Risk Services can help make sure you know what contingencies your policy includes.

The Extensions

Group personal accident policies are shaped according to the insured’s needs. Due to the potential for a variety of needs, insurers offer plenty of extensions—some of which are listed here—to mould a policy that works for everyone:

  • Legal expenses
  • Medical expenses
  • Hospitalisation
  • Dependents and family members
  • Coma
  • Catastrophe
  • Counselling
  • Re-training

This list is just a sample of available extensions. We will work with you to construct a bespoke policy.

The Exclusions

The breadth of personal accident insurance—insuring activities that occur both in and out of the workplace—means that insurers must limit their policies’ scope by excluding certain circumstances. Some of the most frequent exclusions include:

  • The insured being under the influence of alcohol
  • Self-inflicted injury or disease
  • Pre-existing physical defects or infirmities
  • Certain sport and pastimes (such as winter sport, motorcycling and bungee jumping)
  • Childbirth, pregnancy, venereal disease or AIDS
  • War risks and other market exclusions
  • Illness occurring within 21 days of the start of illness cover
  • Drug use

Insuring Your Most Valuable Asset

Your employees are your business’ most valuable asset—without them, your business would be nothing.  With a bespoke policy from the insurance professionals at Sirelark Risk Services, you can be sure that your business and its employees are protected on all sides.

The content of this Cover Overview is of general interest and is not intended to apply to specific circumstances. It does not purport to be a comprehensive analysis of all matters relevant to its subject matter. The content should not, therefore, be regarded as constituting legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. Further, the law may have changed since first publication and the reader is cautioned accordingly. © 2014 Zywave, Inc. All rights reserved.

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