Unique insurance challenges the on-demand workforce faces


by Maureen Ball, June 26, 2018

Unique insurance challenges the on-demand workforce faces

As an on-demand worker, you do not have access to the same protections that a traditional employee has. When you work for someone else, they are required to have certain compulsory type of insurance in place, such as:

  • Workers’ Compensation – which provides protection to workers if they suffer from a work-related injury or disease

In other instances, employers should most certainly have:

  • Public Liability Insurance – if an employee, due to negligence, causes damage, loss, injury, or death to a third-party, their employer’s insurance policy will cover related legal expenses.
  • Third-party Personal Injury Insurance – to cover third-party injury for motor vehicle accidents involving an employer-owned vehicle during a job

While you work for an employer, you generally don’t need to search out insurance cover related to your work and income unless you want additional protection. Your employer may even offer one or more of the essential types of insurance everyone needs to have through a group policy, such as health, life or disability.

Because this employer-employee relationship is still the norm, there is a general lack of awareness around getting the right insurance when you work as an on-demand worker. Most people are so used to insurance being taken care of by employers – they don't necessarily consider them when they shift to the Gig Economy.

While the compulsory and voluntary insurance employers offer are convenient, this has become a crux for many on-demand workers. Those in the Gig Economy often do not fully realise the steps they need to take to protect themselves because there really is no guidebook.

The types of insurance you can use to protect you

There are many different types of insurance. All types fall into two main categories:

General Insurance is about

Things - Like cars and buildings

Financial Loss - When fire burns down a business and cannot continue to trade

Third Parties - When someone blames you for damaging their property or injuring them from your actions

You - When you get injured, become ill or if you die

Life Insurance is about

You and your Financial Position - When you get injured, become ill or if you die

Do you notice something about general and life insurance? They are both designed around ‘you’ and ‘your.’ Protecting your assets, your loved ones, and you in the case of damage, loss, illness or injury.

There are dozens of types of insurance that you may have, depending on your lifestyle, finances, and work. They range from the essentials everyone should use, such as life, health, motor, and permanent disability insurance, to protection that only certain groups of people need. Pet owners may have pet insurance. Homeowners, home insurance. Professionals, liability insurance.

As an on-demand worker, there are certain types of insurance you should definitely consider. What is relevant to you depends on a lot of factors, such as the nature of your work, how you contract work or the flexibility involved in the type of work you do.

How do you know what type you need? Consider what risks you have to account for. Make a list. Use that list to check you are protected wherever you are vulnerable.

Here are a few questions to help you get started:

  • Who is responsible if you have an accident whilst working?
  • How are you going to live and pay your bills until you are back to normal?
  • How will you get to work or earn a living if your car is damaged, lost or stolen?
  • What happens if you inadvertently cause someone to be injured or damage their property whilst you are on a job?
  • Who is responsible for the tools you use whilst on the job?
  • Does the work that you do involve giving a third-party advice or instruction on what or how something should be done?
  • Does the work you do involve obtaining written permission or working under a contract to do something?
  • Are you required to have specific insurance covers in place before you can begin a job?
  • Are you required to be registered for GST?

There are different types of insurance to cover these situations. Here is a brief overview of each class of insurance.

Personal Accident/Income Protection

These types of insurance are used to replace part of your income should you suddenly become unable to work due to illness, certain medical conditions, or accidental injury.

Motor Vehicle Insurance

You’ll need compulsory coverage as per your state or territory’s requirements to protect anyone you injure whilst driving, and you may also elect comprehensive protection for damage to your vehicle or property, or theft.

Public Liability Insurance

This insurance protects you against financial loss if you are found liable for causing economic loss, damage to property, injury or death to another person.

Professional Indemnity Insurance

If you give advice or offer services, professional indemnity insurance protects you if anyone suffers loss as a result of your advice or service. Accountants, consultants, architects, designers, financial advisors, and other professionals would need to have this insurance.

Tools of Trade Insurance

Any tradesperson should have this cover, which protects against theft or unexpected damage to tools and equipment.

Legal Expenses and Tax Audit Insurance

In the case of a tax audit or legal issue, this type of insurance will cover professional expenses incurred.

How Much Coverage Do I Need?

How much cover you’ll need depends on your circumstances and risk tolerance. Ultimately, you need to look at your situation and your finances and make sure you’ll have enough protection in place so you’ll be able to continue paying your bills and meeting your responsibilities until you are able to get through your unexpected ‘disaster,’ whether it is a broken arm, stolen tools, or a lawsuit.

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