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Nov 5 2015
90% of UK SME’s do not have an accident and sickness plan

Posted by Ian Johnston

Accident and SicknessAccording to a recent survey UK-based SMEs are self-insuring against long-term employee absences.

Self insuring in this case means meeting payments from company funds.If employees are absent for more than six months with a serious condition, 43% of employers would continue to pay part of their salary even though there is no legal obligation to pay anything after the statutory sick pay period.

A further 6% continue to pay their full salary, the survey of 250 SME decision-makers by Ellipse shows.

Some 35% of SMEs stop paying statutory sick pay after six months.

The majority (90%) of SMEs do not have long-term sick pay insurance in place to cover replacement salaries.

The research also found some self-insurance for short-term absences, with 45% paying more than statutory sick pay during the first 28 weeks of an absence. Of this figure, 26% pay employees a full salary and 19% pay part of the salary.

Ellipse also surveyed 500 employees in SMEs across the country and found just over half (51%) feel their employer would support them financially if they were absent from work for a long period.

John Ritchie, chief executive of Ellipse, said there is an important role for corporate advisers to play in highlighting the risk of absence alongside the insurance options to mitigate it.

It is very simple to set up an accident and sickness policy that would pay your employees for a period of time to be decided by you after a period of absence again decided by you. So,for example, you could pay 75% of their salary after 4 continuous weeks of certified absence and then continue to pay them for 9 months. This would be covered by a monthly insurance premium. The terms are flexible and you can choose whatever periods and levels of salary to suit your business model,

To provide this sort of employee benefit is relatively low cost but high impact as an employee retention tool.

For more information please contact The Insurance Service.


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