Video:

Insuring-against-employer-liability

Business benefits of employer liability insurance

Author: Matthew Haswell, James Kirk (yBC.tv)

Categories: Business risk, Cash flow, Employees
Tags: insurance, liability, sick pay
A business benefits from having insurance when it helps them cover the cost of sick pay. In this TV show Matthew Haswell discusses insuring against employer liability.

A business benefits from preparing for the unknown

On the other side if you do have particular sickness absence, you can insure against the liability for the employer to pay the costs. Now you can insure individual salaries so that if an individual is off sick the employer is able to maintain a percentage of their salary by way of insurance, an insurance product will actually pay the employer the employee’s salary and then the employer can pass that onto the employee. So the employee remains as an employee, remains able to participate in other benefits, but the employer is protected against the cost of maintaining that salary. And really that goes back to the old reason of why do we have insurance and the reason for that is because you’re paying a known or a premium that you can keep a handle on against the unknown cost of the liability. So it’s really a known cost of insurance versus an unknown cost of liability and that’s something that’s picked up by finance directors and having a known cost for several years in the future of insurance compared to the unknown cost of absence is a comforting thing. And quite often some of these insurance products will have associated benefits. For example income replacement insurance quite often comes with a product called an employee assistance plan, which essentially is a telephone based and an online based resource that employees can access relating to questions regarding health, stress, anxiety, medical issues and quite often that includes face to face counselling as well and the insurance companies tend to provide that because any, I think whilst it may be seen as a freebie obviously the insurance company like to think that those associated products will have a positive impact on absence, therefore they won’t have to pay out too much in claims.

If you are interested in issues like insurance and it's business benefits, why not browse more videos on Inside Finance TV?


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