There are many inherent risks associated with doing business, being a trader and also being a trader on your own can significantly increase that risk. Questions arise around the safety of your job. What if I am injured at work? How will I support my family? How will I meet my financial obligations? These are just some of the concerns of traders who work daily in an uncertain environment.
Consider an example of a landscaping business operated by one man, with many services offered, including lawn mowing, mulching, and landscaping. Now imagine if the owner of this company broke his leg at work after falling from a ladder. The doctors said that he was quite unwell and that he would not be able to work for a few months. Unfortunately, the landscaping business owner did not have an income protection policy and has suffered not only the physical pain of his injury, but also financial hardship and loss of business. Many of his loyal clients have sought out other gardeners to meet his landscaping needs and the landscaping business owner has to rely on his wife to support him and his three children. Obviously, this is a less than ideal scenario.
Income protection is a form of business insurance that can protect up to 75% of your gross income in the event you are unable to work due to injury or illness. Income protection insurance, unlike other insurance policies, will provide a monthly payout if you are unable to work due to illness or injury. Income protection is important for all workers, but it is especially essential for merchants. Feedback from the Australian insurance industry for tradesmen indicated that tradesmen have the highest number of lost earnings claims compared to other occupations which often suffer loss of earnings due to injury. It could be concluded that traders are at a higher risk of losing their income.
Income protection is widely available from companies that offer insurance specifically for merchants. Most standard merchants will have no problem receiving income protection coverage. However, the premium increases depending on the type of trade, age and your status as a smoker. Your premium generally increases as you get older. Higher risk trades also face higher premiums.
There are several options available under income protection policies. The option chosen on the application will affect your ability to receive claim payments if an illness or injury arises.
benefit period
The benefit period refers to the maximum period of time that you will continue to receive benefits once you have claimed for each event.
Waiting period
The waiting period describes the period of time from the date of your illness or injury that you are unable to work before you begin receiving benefits from your claim. For a merchant, the typical time is 30 days before he is eligible to receive benefits.
Regardless of the cost of the premiums, the loss of earnings insurance payment is a small price to pay for the potential loss of income and business that a merchant may face if injured or ill. Self-employed individuals are generally not eligible for workers’ compensation, so the need for income protection is much greater. Alleviate these fears by researching possible income protection policies offered by different companies. Income protection policies offer benefits to merchants if they are unable to conduct their normal business activities. Protect yourself today.