Personal Accident insurance: Protecting employees

They are often cited as a company’s greatest asset, so it’s important to have measures in place to help employees return to work as quickly and efficiently as possible, following an accident. Some companies are therefore adding ‘Personal Accident’ insurance to their employee benefits package, to offer protection for both themselves and their staff.

According to the Health and Safety Executive (HSE), 31 million working days were lost in 2016/17 due to work-related ill health and non-fatal work injuries. This situation poses concerns for both the employee who is unwell and possibly facing a loss of earnings through their inability to work, plus the employer who may need to find someone to cover the work whilst the worker remains incapacitated.

The situation can become exacerbated, where an employee chooses to launch a personal injury claim against the employer. Such legal cases can be protracted and stressful for all involved, not to mention costly. Between January and March 2017, personal injury claims accounted for almost all (95%) of unspecified money claims.

Employers’ Liability (EL) insurance is a legal requirement for most UK companies which employ one or more person. This is to ensure that employees who suffer an accident or incur a disease in the course of their employment will be able to receive compensation where their employer is responsible. Some companies also choose to take out Personal Accident (PA) cover to form part of their employee benefits package, in addition to their EL insurance cover. Personal Accident insurance differs from EL insurance in a number of ways and offers advantages for employer and employee alike.

For the employer, PA guarantees financial cover in the event of an employee sustaining an accidental bodily injury. This is paid either as a lump sum or a weekly benefit to help support employee wages, plus any ancillary costs such as retraining expenses or the cost of hiring additional staff.

However the employee also benefits from a guaranteed continued income whilst they remain out of action.

Whereas Employers’ Liability claims can involve disputes between the employer and employee which can lead to lengthy trials, Personal Accident insurance offers a swift financial solution and removes blame from the equation. Indeed, PA cover may remove the financial incentive for an employee to launch an EL claim.

A key advantage of Personal Accident is that it aims to return employees back to the workplace as soon as is reasonably practicable, often through rehabilitation methods such as physiotherapy or counselling. Aside from the financial benefits this brings, it may also result in reduced business interruption, since manpower is restored more promptly.

In the event of multiple employees unable to work, the benefit of having Personal Accident insurance is even more significant.

Increasingly, companies with Personal Accident cover in their employment package are using this as a means of attracting talent to the workplace. Through offering this, prospective employees can be assured that the employer has the financial means to support them through unforeseen absence resulting from injury or illness.

There’s a misconception that Personal Accident claims need to provide evidence of negligence. However it’s possible to call upon Personal Accident insurance where the incident was purely accidental and where no blame is apportioned. This also means that there’s no requirement for investigations into how the accident happened.

Another myth is that any accident must happen on work premises for it to qualify under a Personal Accident claim. In fact, Personal Accident policies exist which allow for the incident to have taken place anywhere and at any time – even abroad.

The Health and Safety Executive reports annually on the number and types of workplace accidents. In 2016/17, there were 609,000 self-reported non-fatal injuries and a further 70,116 reported by employers. Slips and falls topped the list as the most common accident, with 29% of injuries resulting from this type of incident. Lifting and handling was the second most common type of accident, followed by being struck by an object.

Types of workplace accident 2016/17

  • Slip, trip and fall on same level
  • Lifting/handling
  • Struck by object
  • Fall from height
  • Acts of violence
  • Contact with machinery
  • Strike against something

Any employer has a duty to protect the health, safety and welfare of their employees. Taking out Personal Accident cover should not replace this duty of care but should rather be used to enhance it.

Shaun Fagan, Senior Accident Health Account Underwriter for Allianz Insurance plc, supports this idea:

“There’s no substitute for effective risk assessment and robust health and safety measures in the workplace. However, where accidents do happen, Personal Accident insurance can offer both the employer and employee peace of mind that they’ll receive appropriate financial and rehabilitative support whilst the employee is absent. The ultimate aim is to return the employee to the workplace as soon as is possible and appropriate, and to minimise business disruption.”

A company director extended his business trip to Mexico so that he could do some diving. Whilst in the sea he was stung by a venomous stonefish and needed hospital treatment for his injury. His Personal Accident policy included Business Travel with a holiday extension and so he was fully covered for the accident, despite it having occurred during leisure time.

Personal Accident insurance is suitable for businesses of any size across a wide range of industries. It serves a number of purposes, from providing financial security for both employers and employees, to helping minimise business interruption arising from a reduced workforce. Accidents are unpredictable, so having the relevant cover in place can be reassuring to both company owners and their staff.

Source: Allianz Insurance plc