Determining the right ACC cover for your business

Protection against the consequences of personal injury is an important part of operating any business. Options available include ACC CoverPlus, ACC CoverPlus Extra, no cover or acquiring insurance from a private provider.

All self-employed and shareholder employees should have some form of ACC cover. If no action is taken, ACC CoverPlus is the default policy that will apply.

ACC CoverPlus┬áprovides 24/7 cover for all workplace injuries, weekly compensation based on 80 percent of an individual’s earnings and access to a full range of medical and rehabilitation benefits. However, in self-employed or shareholder employee situations, this policy may not provide a satisfactory level of compensation and the requirements to satisfy a claim can be onerous. For example, a person’s prior year income tax return may not be sufficient to prove a person’s loss of earnings.

ACC CoverPlus Extra can provide a better option. It has all the standard benefits of ACC Coverplus. However, you can negotiate the level of cover, so that 100 percent is received should an accident occur. There is also no requirement to prove loss of earnings when making a claim. The additional cost of the cover is approximately four percent more than the default cost.

For example, a self-employed tradesman injures an arm and his doctor issues him with a certificate stating a recovery period of six weeks.

  • If the tradesman has ACC Coverplus, he would have to report to ACC to confirm the number of hours worked each week to determine his entitlement to compensation and prove his loss of earnings, which can be difficult if his income fluctuates from year to year.
  • Compare this to ACC Coverplus Extra, under which the tradesman has previously agreed cover for $800 per week, which ACC will pay as weekly compensation with no adjustments and no requirement to confirm loss of income.

A shareholder-employee with no PAYE or shareholder salary allocation from the company would by default have no ACC cover, however they can apply for ACC Coverplus Extra.

Private Insurers offer additional options for accident and sickness cover through one of the commercial insurers. In some cases a combination of both ACC and private cover may provide the best solution.

Each individual should evaluate their own personal circumstances, risks and associated costs to determine the best option.

Published Winter 2012.

Serious about your success?