Personal accident insurance pays out in the event that the policyholder suffers personal injury. While this is not exclusively a business insurance policy, it is a good idea for business owners to take out such a policy. If you operate a small business that requires you to function, it goes without saying that the business will cease to bring in an income if you are injured.
Personal accident insurance policies are usually defined in terms of the accident and range from cash for accident policies, accidental death insurance and disability cover.
General personal accident insurance
This type of personal accident insurance pays out in the event that the insured is injured. The cash payout is intended for treatment costs (much like a hospital plan) but also for expenses that cannot be paid as a result of the insured not working. The money may be used for rent, groceries, water and lights or other expenses. The type of injury the policy will cover depends on the insurance company. Some insurance policies may pay out for slipped discs in your back, while others only if you lose a limb, for example. Most claims are made for car accidents, however.
Personal accident insurance for death
Both a life insurance and personal accident insurance policy, accidental death cover pays out in the event that insured dies from accidental causes. The payout is given to the beneficiaries as listed in the document. The definition of an accident is defined as all but natural causes and disease. For example, a personal accident insurance policy for death will cover the insured if he or she is killed in a car accident, but not if he or she is diagnosed with cancer.
The advantage of an accidental death insurance policy is that anyone can opt in for it. While common life insurance policies prohibit certain clients from cover, such as those with a preexisting condition that makes them a high risk of death, then they can get an accidental death policy. There are no medical exams as accidents are unforeseeable.
Personal accident insurance for disability
This type of policy pays out in the event that the policyholder is disabled and can no longer work. It is usually a benefit of a life insurance policy, but exists as a standalone policy for those insureds who do not qualify for full life insurance. Disability cover traditionally extends for a longer period than a life insurance policy as disability is not assured.
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