01 / The meaning
What it means.
The source might be an income protection policy, an accident benefit, workers compensation payments or another arrangement. Each has different eligibility, earnings definitions and payment rules. A benefit related to personal incapacity is different from business interruption cover responding to a defined disruption to the business. First establish whose income is being replaced and what event must occur.
For an owner, distinguish personal living costs from payroll, rent and other business commitments. An amount based on salary may not correspond to turnover or dividends. Other payments can affect entitlement through offsets, so several arrangements do not necessarily add together without adjustment. This glossary describes the concept for understanding documents; it does not establish that BAU offers personal income protection or that a particular benefit will be available.
02 / Put it in context
A practical example.
Hypothetical example: a sole trader expects an accident benefit to meet both household expenses and all business overheads. A review separates the insured personal earnings calculation from costs that the business will continue to incur.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Identify the person or business whose income is being measured.
- Check the insured trigger, earnings evidence and payment duration.
- Review offsets and distinguish personal income from business overheads.
04 / Start a useful conversation
A question for your broker.
Which lost earnings does this benefit replace, and which continuing costs remain separate?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
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