Each company with 500 plus staff in the UK is estimated to be carrying approximately £9.36 million of un- insured liability.
Punter Southall Health & Protection (PSHPC) finds worrying evidence that HRDs are sitting on huge data inaccuracies that leaves their staff un-insured, potentially meaning their companies are unknowingly holding many £ millions of self-insured liabilities; 15.6% of employees are unknowingly un-insured, based on new research undertaken by Punter Southall Health & Protection (PSHPC), and each company with 500+ staff in the UK is estimated to be carrying approximately £9.36 million of un-insured liability. So are HRDs “sleepwalking” into huge claims and liability problems.
To coincide with the launch of Gladis, a self-serve platform that reduces the employer risk, the research finds worrying evidence that HRDs are sitting on huge data inaccuracies that leaves their staff un-insured, potentially meaning their companies are unknowingly holding many £ millions of self-insured liabilities. PSHPC Intelligence reveals that; 74 percent of these companies have at least some data error issues that could potentially leave staff un-insured should they need to make a claim. On average 78 out of every 500 staff (15.6 percent) are not correctly insured should there be a claim.
Each company with 500+ staff is estimated to be holding £9.36 million-worth of un-insured liability. John Dean, PSHPC Sales & Marketing Director, says: “Insurers can decline to pay a claim when data provided to insurers is inaccurate. However, it is often only when a claim is made that data errors are exposed. The key problem is that insurers only currently receive employer census data once a year, and often HRDs don’t know the data they need to regularly provide to ensure correct cover is in place. HRDs are sleepwalking into major problems should claims be made.”
Common reasons employees can suddenly find themselves not covered or not covered to the amount they thought, include: Late Entrant: Cover is often provided based on members joining the policy at their first opportunity. If a member is a late entrant, medical underwriting could be required to obtain cover. Long Term Absentees: Cover for long term absent employees (long term sick, for example) is subject to full disclosure to insurers. Salary definitions: Employees can change salary mid-year, such as pay rises, being on maternity leave, on a sabbatical, on sick pay, or on flexible/compressed hours. Correct salary disclosure is vital.
Change in office location: Insurers base premiums on office locations. Any movement of staff needs to be disclosed to insurers as this could make the whole policy invalid. High Earner pay rises: Pay rises may take some employees into a band that causes them to need to complete medical underwriting. Auto enrolment: Following auto-enrolment, employees may become eligible for group protection benefits. Keeping insurers informed of these ‘new entrants’ is important. Company headcount growth/reduction: Significant growth/reduction in headcount can trigger insurers reviewing insurance terms. Providing regular data will reduce the risk of cover not being in place when needed.
John Dean says: “The level of un-insured employees revealed by Gladis should be a wake-up call to businesses. The risk of self-funding life assurance is just too much for most companies, especially in today’s economic environment. Because Gladis asks for data to be sent monthly, the chances of wrong data being passed to insurers twelve times a year is substantially less. More accurate data also means employers can also save significantly on their premiums.”
