If you run your own business, you will often be largely or solely responsible for generating income. Whether you’re a sole trader, a partnership, or the director of a limited company, you will often be a vital cog in your business, and its performance would likely struggle without you.

Recent data from the Office for National Statistics (ONS) has revealed that an estimated 185.6 million working days were lost because of sickness or injury in 2022, with the ONS reporting that this level was a record high.

Between June and August 2022, the ONS reported that around 2.5 million people reported long-term sickness as the main reason for economic inactivity, up from around 2 million in 2019.

Read on to find out more about record levels of sickness and what you can learn about protecting yourself from examples in the farming sector.

Sickness absence rate is increasing

According to the ONS, the sickness absence rate (the percentage of working hours lost because of sickness or injury) increased to 2.6% in 2022.

This represents an increase of 0.4 percentage points from 2021 and up 0.7 percentage points from its pre-pandemic 2019 level. It is now at its highest point since 2004.

The most common reasons given for sickness absence in 2022 were:

  • Minor illnesses (29.3%)
  • “Other conditions” (23.8%)
  • Musculoskeletal problems (10.5%)
  • Respiratory conditions (8.3%)
  • Mental health conditions (7.9%)

While ill health affects workers across all sectors, recent data from the world of farming – where agricultural businesses are often run by just one or two key people – have illustrated just how important having financial protection in place can be.

Unexpected accidents, injury, or ill health could have a big impact on your business

Farming UK reports that, in agriculture, figures from the Health & Safety Executive (HSE) show 12,000 workers suffered from work-related ill health between 2019 and 2022.

There were also 11,000 non-fatal injuries to workers during the same period, the safety watchdog's figures show.

Being unable to work due to accident, injury, or ill health can have a devastating effect on your personal finances. If you’re unable to work you may be unable to generate an income, and state benefits are unlikely to be sufficient to help you to maintain your regular commitments.

Without protection, you may then have to rely on your savings to make ends meet, borrow money, or sell valuable assets to help you generate the cash you need.

Responding to the HSE figures, leading insurer NFU Mutual, who specialises in working with customers in the farming and agricultural sectors, said serious illnesses and accidents could leave farmers “unable to work, impact production, and in some scenarios put the farm’s long-term viability at risk”.

David Nottingham, protection expert at NFU Mutual, said farmers “know better than most” that unexpected events such as injury or ill health could have a major impact on their business.

“Unforeseen illnesses and accidents can put a strain on the farm, particularly if it is heavily reliant on one or two people,” he explained.

NFU Mutual highlighted three key ways that farmers – and anyone who owns a business and wants the peace of mind that they can deal with unexpected events – can protect themselves and the company.

“There are a number of ways to guard against those problems and provide a lump sum of cash or an income to secure the future of the farm and help keep it running,” Nottingham added.

Critical Illness cover provides a lump sum if you’re diagnosed with a serious condition

If you’re diagnosed with a serious condition, Critical Illness cover provides a tax-free lump sum that you can use to repay borrowings, pay for home adaptations, or meet other commitments that may be needed.

It’s particularly valuable if you run a small business – such as a farm – as it provides an injection of financial support that can help you to pay essential bills during a period you may not be able to work.

Common conditions covered under Critical Illness cover include:

  • Serious types of cancer
  • Serious heart attacks
  • Stroke
  • Parkinson’s disease
  • Multiple sclerosis
  • Loss of limb or eyesight.

Official figures from the Association of British Insurers (ABI) show that insurers paid more than £1.2 billion in Critical Illness cover claims in 2022. More than 90% of claims were accepted, and the average payout was nearly £68,000.

Getting a Critical Illness quote takes just a few minutes. The cost will be influenced by factors such as your age, your health, your lifestyle, and whether your job or hobbies are considered “high-risk”.

Our comprehensive guide to Critical Illness cover contains lots of useful information and answers to many frequently asked questions. 

Income protection can replace income if you can’t work due to illness or injury

NFU Mutual also highlight how income protection can help farmers to provide a regular income if they are incapacitated and unable to work, whether that’s through illness or accident.

Income protection is also extremely beneficial for anyone who works for themselves, as it can provide a monthly injection of cash if you’re unable to generate an income though work.

For example, Farming UK reports HSE figures that show there were around 6,000 work-related cases of musculoskeletal conditions in agriculture between 2019 and 2022, affecting 1 in 50 workers, higher than workers in other industries.

According to the Association of British Insurers, income protection claims for musculoskeletal conditions increased 40% in the UK during 2021.

So, in this example, if you were unable to work because of back pain, neck pain, or upper limb problems, income protection could provide a regular income while you recuperate and until you return to work.

Accidents can happen at any time, in any walk of life. So, if you’re worried about how you would pay your mortgage, rent, or other regular commitments if you were unable to work though illness or injury, income protection can provide real peace of mind.

The ABI say insurers paid more than £735 million in income protection claims in 2022. Almost 28,000 claims were paid, with an average claimant receiving £23,380.

Life insurance can protect the business

One further area to consider is: “what would happen to your business if you unexpectedly passed away?”

David Nottingham from NFU Mutual says: “Those that co-own businesses need to consider what would happen if a co-owner died.  They or their family may want to sell their interest in the business. 

“Putting in place the right cover and agreements can help the continuing owners retain control of the business and protect the outgoing owner and their family.”

As an example, life insurance can provide a lump sum to help the co-owners of a business buy the deceased person’s share. This ensures the continuing viability of the business, while also ensuring the deceased’s family receive the value of their share of the company.

We can help you to find the protection you need

If you want to ensure that you can continue to pay your regular commitments if you are unable to work due to accident or illness, or you want the reassurance that your loved ones can benefit from your share of a business on your death, protection is essential.

As life insurance, Critical Illness cover, and income protection experts we can help you to find the cover you need at the best possible price. We’ll scour the market for you and compare prices so you can benefit from great cover at a competitive rate.

Get a life insurance quote or a Critical Illness cover quote online now.

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