A business owner is the “anna datha” for the families that he / she puts food on the plate. This is a big position of respect for the business owner at the same time this position also adds a fair share of responsibilities on the business owner’s plate. In this post we would like to elaborate on some of the ways in which business owners can protect the livelihood of his employees. We would also try and clear some of the questions that we came across in our interactions with the business owners.
The first and foremost insurance protection option that a business owner should explore is Employee State Insurance from Govt of India. This is a health insurance scheme where contributions are made by the employer, employee, state government and the central government. There are certain criteria for admission into this scheme. The business should be employing at least 10 employees and their monthly salary should be below Rs 21000. More details of the scheme can be found at the official website of ESI. Details of the contributions to be made and the benefits that the employees get are also available in the ESI site. Not all businesses or all employees of may be eligible for the ESI scheme. There are other insurance policies that are available from PSU and private insurance companies.
Workman’s Compensation is an insurance coverage that businesses deploying their employees on tasks that have a chance of injuring them. Workman’s Compensation cover protects both the employee and the employer from certain events. The employee gets compensated for a disabling event and for fatal accidents. Thus the employee or the employee’s dependents can get compensated in the case of an accident. The employer on the other hand get unlimited liability protection against any legal action by the employee after a injury event. There are certain extensions available under this cover that includes certain diseases and also medical expenses. You must check with your agent or broker for the inclusions and exclusions. One big criteria for coverage is that the accident should have happened while the employee was dispensing with his work duties.
Accidents don’t just happen at work. Your employee may get injured while he or she is off work as well. If they get injured they may not be able to afford the appropriate medical treatment as it may be beyond their means. This is where Group Accident insurance cover comes to the the help. Group Accident coverage covers for any accidental death, permanent disability and temporary total disability. It also covers medical expenses linked to accident. Some policies offer topups for covering the education costs for the children in case of parent death. Your employee could be anywhere in the world and the accident can take place anywhere. Group Accident insurance usually covers for such events.
Lastly we want to talk about Group Health Insurance. Healthcare costs are rising in the country. New ailments and diseases are afflicting the human population ever more so nowadays. Affordable care is going to be very difficult to attain for all of your employees. Group Health Insurance is a coverage that you might want to consider for your employees. This would cover for medical, hospitalization, surgical and treatment expenses. You might be able to create a policy for your employees that avoids medical checkup, waives of the waiting period for pre-existing diseases and have maternity benefit included. Families of your employees can also be included into the coverage. Group Health Insurance policy can be highly customized to your specific need and this policy is always cheaper than individual health insurance policies.
You as a business owner might want to think about any of the above insurance coverages as a way to ensuring your employees are taken care in the hour of need. These may also be good ways to retain your employees as they know that you are taking care of them and they feel happy working for you.
One of the biggest apprehensions that we came across when talking to business owners is about employee churn. Employee churn rate is quite high in many segments. For example in restaurant segment the churn could be as high as 60%. One of the business owners said “I dont know if this employee is going to be with me in the next month. The money that I spend on the insurance premium may go waste if the employee leaves”. The good thing about most of the policies that we have talked about above is that you can always update them when new employees join you or they leave you. The premium is prorated for the period of cover. You will receive a credit when you remove employees from the cover or you might have to pay more if more employees are added. Most of the policies would allow you to update the employee list every month.
We hope we have addressed comprehensively how you could protect your businesses’ biggest asset, your employees. You have a big responsibility on your shoulders. After all one of the biggest satisfactions that you derive being a business owner is that you have provided livelihood to many families and that they feel that they are taken care off by a good hearted boss.