The average contractor will have noticed that the news has been skewed in the direction of the government’s IR35 proposals in recent weeks. Whilst the negotiations, consultations and arguments are underway, it might be useful to turn to a more humdrum matter for a moment: contractor insurances.
Insurance, of course, isn’t so humdrum if you’re recovering from an accident or an illness. In the contracting world, no work means no income – unless you’re properly insured. There’s no employer sick pay to fall back on, so you need to invest in your own safety net (as Bill Clinton once put it, most people are one pay check away from poverty). This is where permanent health insurance can come to the rescue. There are a few core points to look out for when selecting a policy.
A good policy should cover both salary and dividends (some insurers exclude the latter), cover you even if you’re on a short term contract, and insure you on an ‘own occupation’ basis. An ‘any occupation’ policy will be cheaper, but don’t be tempted. Own occupation specifically covers you for your area of expertise – and where you do it; with ‘any occupation’ cover, you’ll find your benefit being stopped because you haven’t agreed to work in the post-room during your recovery period. Always choose a policy with guaranteed (not reviewable) premiums if you don’t want to be confronted with sharp rises in costs. And a final canny tip is to select an insurer that the British Medical Association uses for its members – if you do, you can be confident that it will employ a fair and reasonable definition of illness. Just don’t wait till tomorrow.
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