Your employees are your valuable assets, a hundred times more than your brand, intellectual properties, and cutting-edge products. Employee well-being and safety should be your top priority as they play a key role in contributing to your business turnover. No matter how proactive you are in preempting accidents at the workplace, the inevitable cannot always be avoided. Hence, you must cover your employees under comprehensive employee insurance plans at the outset to avoid claims, legal hassles, and even conviction.

What Is Employee Benefits Insurance?

In recent years, employers have begun investing big time in employee benefits insurance, health, and wellness as part of their total engagement strategy. Thankfully, this shift in employer practice is taking place more on humanitarian grounds than from the standpoint of employee compensation alone. Injuries, falls, accidents, hospitalizations, and deaths are unavoidable events that can occur anywhere. However, when they happen on duty, the employer is morally and legally obliged to make suitable financial compensations toward damages and/or loss of life.

Employee benefits insurance includes medical health insurance, group term life insurance, accidental death, and dismemberment policies. However, some organizations offer a more comprehensive package which would consist of short and long-term disability insurance, dental and vision schemes, and retirement plans.

What Are The Types Of Employee Benefits Insurance?

To retain prized workers in their fold, employers must offer attractive benefit schemes to avoid losing them to greener pastures. Employee Benefits Insurance can work as a huge draw for employees.

Let us now walk you through the important insurance types.

● Group Health Insurance

This is the most common type of employee benefits insurance that covers the employee’s medical expenses along with his dependents. It is an employee health insurance policy where the employer either wholly or partially bears the premium. The benefits include critical illness, ambulance charges, maternity coverage, newborn coverage, hospital room rent, cashless treatment, annual health check-ups, diagnostic tests, consultation fees, OPD benefits, etc.

● Group Personal Accident Insurance

Benefits under this insurance type include — ambulance charges and hospitalization expenses due to accident-related injuries resulting in partial/complete/temporary/permanent disability or even death. It further includes other types of injuries like burns and bone fractures. In the event of employee death, the entire sum insured is given to the nominee.

● Employee Life Insurance

This type of insurance is completely employer-sponsored. The employee is insured, and the sum insured is paid to their nominee in the event of their death. Gratuity benefits are given when employees have served a certain number of years with the company. The policy also aims to provide retirement benefits to employees.

The benefits of employee benefits insurance for your business can be huge in today’s market of skill shortage, where finding and keeping top talent is a challenge.

In this short blog, we outline the importance of risk management in business -

1. Helps In Identifying Potential Risks

Identification and sound assessment of potential risk factors to an organization help to devise procedures to control (or at least mitigate) damage to business capital and earnings. Strategic planning and robust measures minimize risks and their impact on business operations. There could be multifarious factors that pose risks to business operations — internal (conflicts), financial, technological, political, environmental, social, and global.

2. Protects Business and Cuts Losses

By considering unexpected threats that could dissolve a thriving organization, risk management strategies protect business, give immunity, and reduce the possibility of huge financial losses in the future. Risk management is a money-saving scheme.

3. Lends Competence and Credibility To Leadership

Organizations with smart risk management plans in place have a strong market reputation, and their leaders are more confident in business decisions because of strong governing principles that prioritize risk management. Such business heads take aggressive measures with informed decisions to eliminate risks, earning employee trust and respect.

4. Provides Safe Working Environment

Employers and employees can work with a free mind space when they are secured in the knowledge that the organization has robust measures in place to control risks, and minimize their negative impact on future profits and business success. Employees can also be exposed to physical dangers at the workplace. However, company risk-prevention and management policies provide them a safety net, dispelling unwarranted fears and insecurities.

5. Increases Business Stability

Business policies and practices have a cascading effect on business operations. An organization runs with a workforce that contributes to business success and the achievement of goals. However, if the leadership shows incompetence in preventing and controlling threatened risks, it can result in employee insecurity and dissatisfaction, negatively affecting business productivity, sales, and services. On the other hand, intelligent risk-control measures help to stave off the adverse consequences of failed business decisions, promoting business stability.

6. Decreases Legal Liability

Procedures can be designed to minimize risks to prevent unwanted events that result in claims and litigation. As the head of an organization, you are legally liable for the welfare and safety of your workers (and visiting customers). Business insurance, as part of risk-management measures, helps to cover unexpected expenses that arise in the event of injuries, accidents, and deaths on business premises.

In a nutshell, risk management is imperative for all business enterprises, big and small. A robust risk-prevention mechanism prevents a flourishing business from financial destruction and termination of operations.

The insurance industry covers all businesses — small, medium, and big- commercial and corporate. It has its clientele from the service, retail, food, manufacturing, and trading industries, and the list is ever-expanding.

Insurance covers are wide ranging, covering everything from assets — property to human resources, Liabilities — products to services and your Business — Business interruptions.

Loss / Damage of Assets

You can insure your business assets against losses /damages with policies ranging from covering specified risks to all risk policies, common covers protect you against Fire, Flood, Earthquake, Explosions etc.. There are policies covering losses due to Burglary, Breakdowns…

Loss of profits / Business Interruption

Insurance policies are available to protect your business profits which are lost due to an accident at your premises.

Loss / Damage in transit

This is also called a Transit / Marine insurance. It insures your business goods and belongings against damage during transit through postal service, railways, airways, roadways, or marine services. Transit damage can also happen to Laptops, Mobiles for which All Risk covers are available.

Health and Accident covers

Health covers provided to corporate employees to cover their, and their dependents’, medical needs and expenses. It covers hospitalization due to accidents and illness, extending to maternity benefits as well.

Accident insurance provides compensation for Death and Disabilities and is also extended for weekly compensations and medical expenses due to an accident.

Liability Insurance

Liability insurance is a third-party insurance cover. It provides immunity to you against the risk of liability toward a third party. The policy protects you against financial losses that can accrue from potential lawsuits and claims for settlement from the third party who sustains injuries and/or succumbs to sudden death at your business premises. It will also include losses due to damage (if any) to the property belonging to the third person. The insurance company bears the costs for any claims that the third party (or his family members) makes.

Liability policies also provide coverage for Death, Bodily injury or Property Damage arising out of use of your products. Today, Liability policies are also available to cover Cyber and Crime risks.

A smart and successful business person is the one who minimizes the risks arising from real threats — like loss of profits and manpower, damage to assets, and liability, among others — even before they become business problems. Insurance covers provide a safety net to run your business confidently and reduce liabilities incurred.

No business can completely evade risks. Actual and perceived risks are ever-present to threaten a business’ continuity. If it were not for insurance, these risks would result in massive financial losses, hamper business goals, retard organizational growth, and in some extreme cases, even result in complete shutdowns.

The need for insurance has never been more acutely felt than in the pandemic. Small businesses and startups survived on shoestring budgets and the need for protecting their business was felt like never before!!.

Why insure?

Buffers Against Unexpected Events

Uncertainty in business can arise from a global recession, major technological and social disruptions, forced lockdowns, or situations where business continuation is threatened. While these events cannot be protected against, there is another big reason for business continuity being threatened — large accidents or an act of god peril like earthquakes or floods, where business operations are automatically thrown out of gear. Insurance provides umbrella protection to the business during dark times and sustains it. If not for an insurance cover, the stakeholders can get negatively affected indefinitely.

All businesses are adversely hit, and untold suffering befalls business heads, particularly owners of the micro ones, in the event of natural disasters like floods, cyclones, fire, and earthquakes. Man-made disasters like thefts, burglary, and vandalism also cause damage beyond repair to business assets and properties. Small businesses do not have the financial resilience to tolerate such mass-scale destruction of physical and intellectual property in the absence of comprehensive insurance coverage.

Increases Employee Security and Boosts Expansion

You have a happy set of workers when they know that your company is insured against sudden downturns. Employees cannot be secure when they are worried about job sustainability and doubt their retention during a slump period. Security boosts morale, which promotes productivity. You earn their respect when you insure their future with your company. More eligible candidates will be willing to join the workforce, which will grow your business further.

Protects your employees and your pockets

Accidents inevitably happen in the workplace, irrespective of the preventive measures you take to avoid them. As the business owner, you will need to take responsibility for any untoward incident that may happen on your premises. You are liable for your employees’ protection and safety. In the event of injuries, or even deaths, your insurance takes care of huge financial claims and settlements. Imagine the brunt of such unexpected expenses if you had to foot them yourself without insurance.

Protects your back when things go wrong

Suppose you have set up a business to provide professional services to the public. In that case, professional liability insurance will protect you against any financial loss arising from damages resulting from your professional negligence.

An added Bonus

Focus on insurance automatically sensitizes you and your organization to risk and helps you to look at risk management as an important aspect of your work culture leading to better safety and fewer accidents, which leads to less disruptions and helps in business continuity.

Whether yours is a small business or startup or you run a large enterprise, you must keep yourself and your business as risk-proof as possible so that in the event of misfortune, you don’t end up spending a bomb from your pocket to compensate for any damages.