One issue that may not occur to many business owners, until it actually happens, is the potential impact on profitability should one or more employees suffer from long-term illness.

While this primarily affects the employee and his or her family,businesses themselves can also suffer the consequences of someone being off sick for a long period. When asked, in a survey run by a leading insurance company, half of all employers agreed that long-term absence is a potential issue for their business, while a third are concerned about how they would balance their obligations towards employees, while managing the business.

Not just the bottom line
It is not just profitability that can be affected by employees being off sick. Other workers may be concerned about potential issues in the workplace if colleagues are off sick for long periods as a result of stress, accident at work or even illness. In addition, workloads could be pushed onto other employees-or they fear this will happen-when a colleague is absent for a sustained period. Even if a temporary replacement is recruited, this can result in others having to undertake training or cover for inadequacies of experience.

What can a business do to protect itself?
The immediate financial implications of long-term incapacity can be addressed by putting a group sick pay scheme in place. This can be done at a level that is both affordable to the business and also ensures that employees are able to carry on living comfortably while not working. This is far from being simple altruism. By ensuring that employees do not have to worry about money, you may facilitate a far faster recovery from many conditions, which may be exacerbated by stress.
It may also be worthwhile to arrange a group private medical insurance scheme that gives employees (and their families) access to private medical care when it is needed. This can not only ensure faster access to treatment in the first place, but may also shorten ‘downtime’ if specialist private treatment also speeds recovery.

What about the business itself?
In the case of certain ‘key employees’, the business could suffer a disproportionately large financial impact from the temporary loss of his or her services. It is possible to arrange insurance that pays out to the company, in the event of a long period of incapacity of a key person, in order to facilitate recruiting a high calibre temporary replacement-which is likely to cost more than the key person’s salary, by virtue of recruitment/agency fees and compensating the replacement for the short-term nature of the assignment.

As with any form of financial decision, it is important to always seek independent financial advice before making any decision regarding business-related insurance.