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