One of the most important forms of cover for self-employed tradies is personal accident insurance.

This insurance will cover you if you’re unable to work due to an injury, with optional sickness cover also available.

We’ve helped thousands of Australians with their personal accident insurance, and have put together the ultimate guide.

Personal Accident Insurance Guide

In this guide we’ll be covering the following topics:

We hope you find our guide informative, and if you have any questions at all, our friendly team are here to chat with you.

Commonly known as…

Personal accident insurance is known by a few different names, and broadly speaking, they all mean the same thing.

Some of the other names you may have heard include the following:

  • Sickness and accident insurance
  • Accident and illness insurance
  • Accident and sickness insurance
  • Injury and illness insurance

And the list goes on! One thing to keep in mind however is that each of the names above specifically mention illness/sickness, whilst “personal accident insurance” doesn’t.

Does that mean personal accident insurance won’t cover time off work for illness?

No. As long as the illness option is included you will be covered. Provided of course that you meet the other criteria for a successful claim.

Here at Trade Risk we tend to use the term personal accident insurance more than the others.

What is Personal Accident Insurance?

Personal accident is a form of insurance for tradies which can pay you a weekly benefit for a period of time whilst you’re unable work.

If you’re familiar with income protection insurance it is very similar, and we explain some of the differences later in this guide.

To be eligible to claim on the policy, you must have suffered an injury (or illness if the option is selected) that has left you unable to work.

Whilst the insurance is more popular with tradies who work as subcontractors or in their own business, it still has benefits for those who work on wages or salary.

What does personal accident insurance cover?

The insurance will cover up to 85% of your income, depending on the insurer and which options you select.

Accident / Injury

All policies will cover injury as standard, and there is generally no restriction on the type of injury, so long as it’s an accidental injury.

Some policies have an option to only cover injuries suffered on the job, but our preference is for policies which provide 24/7 coverage.

Most policies will have an exclusion for pre-existing conditions. So if you already have a bad knee and you’re making a new claim for an injury to that knee, it may not be covered.

Illness / Sickness

Some policies will refer to illness and some will refer to sickness, but it’s the same thing.

For illness to be covered under the policy you will need to select the relevant option.

There is generally no restriction on the type of illness covered, but as with injury, there will be an exclusion for any pre-existing medical conditions.

If you’re trying to claim for time off work for a condition that you were already aware of, you won’t be covered for it.

Personal accident insurance options

There are quite a few options involved in a personal accident policy, and it’s vital that you understand them as they will have a major impact on your ability to claim.


As discussed above, to be covered for time off work due to illness / sickness you’ll need to ensure you’ve selected this option on your policy.

Waiting Period

This is the amount of time you must be unable to work for until you are able to make a claim.

The options will vary depending on the insurer, but typically the options will include the following:

  • 7 days
  • 14 days
  • 21 days
  • 28 days

Selecting a longer waiting period will result in a lower cost of the insurance, but it also means waiting longer before you can claim.

For example if you select a 28 day waiting period, any time off work less than four weeks will result in no claim.

A shorter waiting period will get you on claim much sooner, but the cost of the cover will be higher.

Not like health insurance…
The waiting period on a personal accident policy is different to a health insurance policy.
With health insurance the waiting period only relates to the time you need to have held the policy before making a claim, but with personal accident insurance it applies to every claim, and it the time between your first day off work and when your payments can start.

Weekly Benefit

Also known as the benefit amount, this is the amount that will be paid to you each week whilst you are unable to work.

When selecting a weekly benefit it’s important to note that you may have to provide evidence in the event of a claim. There is no point insuring yourself for $2,000 a week if you can only prove $1,500 a week in income.

You should also note that benefits paid must be declared to the ATO and will be taxable. So you should be covering your pre-tax income, not your after-tax income.

Agreed Value

We mentioned above that you’ll need to provide evidence of income in the event of a claim, but there is an exception…

With an agreed value policy the insurance company will agree to a weekly benefit upfront, and you won’t be required to provide any evidence in the event of a claim.

The downside is that the benefit amount will generally be limited to around $1,000 per week, depending on the insurance company.

Agreed value can be a great option, provided that the agreed amount is sufficient. It means that in the event of a claim you can concentrate on your recovery rather than going through paperwork to prove your income.

Benefit Period

This is the length of time you will continue to receive benefits for once you’re on claim.

The options vary from one insurer to the next, but a typical set of options will be as follows:

  • 1 year
  • 2 years
  • 3 years

A shorter benefit period will result in a lower cost for the insurance, but of course that is also limiting your cover.

What happens if you get to the end of your 1 year benefit period and you still can’t return to work? You’ll be on your own sadly.

Coverage Options

Some policies allow you to select whether you want to be covered for accident only, or for accident as well as sickness.

Selecting accident-only will be cheaper, but it leaves you exposed if you’re unable to work due to any illness.

Some policies also allow you to select from the following coverage options with regards to accidents:

  • Covered at work only
  • Covered at work and whilst commuting
  • Covered 24 hours, 7 days a week

The lesser cover you select, the cheaper the insurance will be, but again you will be limiting your cover.

Being covered for work only isn’t going to help you if you break your leg on the weekend and can’t work for a month.

We strongly suggest covering yourself properly, which means the 24/7 coverage.

Each personal accident insurance policy will be different in terms of the features and benefits, so if you are considering this form of cover it is important to compare each policy carefully beyond just looking at the cost.

Is it the same as Income Protection?

One of the most common questions about personal accident insurance is if it’s the same as income protection insurance.

It is somewhat similar to income protection, in that its main aim is to replace your income when you cannot work.

But there are some important differences…

Extended benefit period

Personal accident policies will generally provide a benefit period of up to 3 (depending on the insurer) whilst an income protection policy can provide benefits up to age 65.

It can be a lot more expensive to have a benefit period running through to age 65, but if this is important to you, you should be looking at income protection rather than personal accident


One of the most important differences is that personal accident is cancellable, whilst income protection is non-cancellable.

This has nothing to do with you being able to cancel the policy, but the insurer being able to cancel it. Or more to the point, not having to offer a renewal.

With income protection, the insurer must continue providing cover as long as you keep paying your premiums. They can’t refuse to renew your policy regardless of how much of a risk you become.

But with personal accident insurance the insurer can decide not to renew your policy. If you start to become more of a risk or make a lot of claims, the insurer can simply not offer a renewal when your policy expires.

This can be a very big deal, but is often overlooked by tradies when weighing up their options.

Advantages of Personal Accident

The single most important advantage of personal accident insurance for a tradie is that it will pay you a regular benefit for period of time if you are injured and cannot work.

Other advantages of personal accident include the following:

  • No medical questions or tests
  • Capital benefits in the event of permanent disability or death
  • Premiums are generally lower than income protection

Another benefit of personal accident insurance is that it fills a need for people who do not qualify for a traditional income protection policy.

Tradies with a particularly poor medical history may find that they are unable to obtain normal income protection, but with personal accident insurance this is not a problem since the policy is not impacted upon by medical issues.

If you are simply looking for the cheapest form of income insurance to get onto the worksite and you aren’t particularly concerned about the comprehensiveness of the cover, personal accident may be a good option.

Capital Benefits Vs TPD Insurance

One of the advantages that personal accident has over income protection is the capital benefits feature.

The ‘capital benefit’ is the lump sum that a personal injury policy can pay you if you suffer a permanent injury that leaves you unable to work.

Whilst this option is generally not available within a standard income protection policy, you can package TPD insurance with your income protection.

TPD insurance will payout if you suffer an injury or illness that leaves you unable or unlikely to ever return to work.

The benefit amounts available on TPD insurance compared with the capital benefits from a personal injury policy are far more comprehensive, and it will also cover you for injury and illness rather than just injury.

Quotes and More Information

At Trade Risk we can help you directly with personal accident insurance (including the sickness option).

If you prefer the idea of income protection insurance, we also have a specialist we can refer you to.

If you would like a quote on either form (or both forms) of insurance, please hit the green button below or call our experts on 1800 808 800.