What tim­ber work­ers need to know about work­ers com­pen­sa­tion ver­sus in­come pro­tec­tion in­sur­ance

Australian Forests and Timber - - Insurance - By Richard Lay­cock In­sur­ance ex­pert - www.finder.com.au

AS TIMBERBIZ re­cently re­ported, the lat­est data from Safe Work Aus­tralia’s Aus­tralian Work­ers Com­pen­sa­tion Sta­tis­tics shows that the most dan­ger­ous in­dus­try to be in is agri­cul­ture, fish­ing and forestry.

It’s not the most com­fort­ing thing to think about if you’re em­ployed in the tim­ber in­dus­try and it’s a good in­cen­tive to have some form of in­come pro­tec­tion in case you’re in­jured and un­able to work.

If you’re an em­ployee, you are usu­ally cov­ered by work­ers com­pen­sa­tion, which your em­ployer is re­quired to take out on your be­half. But if you are an in­de­pen­dent op­er­a­tor or a part time or ca­sual worker in the tim­ber in­dus­try, you are not cov­ered by work­ers com­pen­sa­tion and you must look to some other form of in­sur­ance to pro­tect your liveli­hood.

While work­ers com­pen­sa­tion does pro­vide a level of pro­tec­tion for work­place ac­ci­dents, it also has its short­com­ings. Many tim­ber work­ers take out in­come pro­tec­tion in­sur­ance for a more com­pre­hen­sive level of cover.

One of the key rea­sons for do­ing so is be­cause work­ers com­pen­sa­tion only cov­ers ac­ci­dents that hap­pen at work, while sta­tis­tics show that more ac­ci­dents hap­pen off the work site than on it. Also, apart from trau­matic events, work-sus­tained in­juries can of­ten take months or years to be­come ap­par­ent (i.e, repet­i­tive strain in­juries) and it can be dif­fi­cult to prove your claim at a later date, par­tic­u­larly if you have left the job in the mean­time. By con­trast, in­come pro­tec­tion in­sur­ance will pay out for in­juries that pre­vent you from work­ing, re­gard­less of where they hap­pened.

Work­ers com­pen­sa­tion ben­e­fits are also capped at around 130 weeks, un­less you are to­tally in­ca­pac­i­tated, whereas in­come pro­tec­tion in­sur­ance will pay ben­e­fits any­where up to 70 years of age, de­pend­ing on the level of cover you choose.

An­other prob­lem with work­ers com­pen­sa­tion is that your em­ployer must be proved to have been neg­li­gent in or­der for your claim to suc­ceed. This can be a dif­fi­cult and time-con­sum­ing process that may re­sult in your claim be­ing re­jected, par­tic­u­larly if it can be shown that you con­trib­uted in some way to the ac­ci­dent your­self.

Add to that the fact that there is no uni­for­mity in ben­e­fit pe­ri­ods and amounts, with each state hav­ing its own par­tic­u­lar work­ers com­pen­sa­tion laws, and the ar­gu­ment for hav­ing in­come pro­tec­tion in­sur­ance be­comes even stronger.

In­come pro­tec­tion in­sur­ance pays you 75% of your nor­mal wage if an in­jury or ill­ness leaves you un­able to work. But there are still sev­eral things to keep in mind when con­sid­er­ing this type of cover.

One is that, sim­i­larly to work­ers com­pen­sa­tion, in­come pro­tec­tion in­sur­ance does not cover part time, ca­sual or sea­sonal work­ers. If you fall into this cat­e­gory and you find your­self un­able to get ei­ther work­ers com­pen­sa­tion or in­come pro­tec­tion in­sur­ance, you may need to look at tak­ing out an­other form of in­sur­ance that will cover you.

The other main is­sue with in­come pro­tec­tion in­sur­ance is how much you will have to pay for it, which is de­ter­mined largely by your oc­cu­pa­tion. As forestry is con­sid­ered a dan­ger­ous in­dus­try, you may find that your job is clas­si­fied as high risk, mean­ing that you will have to pay higher pre­mi­ums or, if you are a tree feller or mo­bile mill op­er­a­tor, po­ten­tially be con­sid­ered unin­sur­able.

If you en­counter this prob­lem, re­mem­ber that in­sur­ers have dif­fer­ent oc­cu­pa­tional clas­si­fi­ca­tions. If you shop around, you may find a provider that will cover you when oth­ers won’t. You could also try seek­ing the ad­vice of a fi­nan­cial ad­viser with ex­pe­ri­ence in this area who can an­swer your ques­tions and com­pare poli­cies for you.

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