Absenteeism: A Risk That Is Often Underestimated

Many entrepreneurs have a good understanding of their business risks. They consider liability, cyber risks, and the continuity of their organisation. However, one important risk often only receives attention when it actually occurs: employee absenteeism due to illness.

When an employee becomes unable to work due to illness, employers are generally required to continue paying salary for up to two years. In cases of long-term absence, the financial impact can be significant. In addition to salary payments, employers may face payroll-related costs, replacement expenses, and costs associated with employee support and reintegration. At the same time, the employee’s workload must be absorbed by the rest of the organisation. In a tight labour market, this is not always easy, and pressure on the team can quickly increase.

What Does an Absenteeism Insurance Policy Cover?

With an absenteeism insurance policy, you can insure all or part of the financial risk associated with continued salary payments during periods of illness. Depending on the level of cover selected, employer-related costs can also be insured.

However, effective absence management is about more than insurance alone. Prevention, proper guidance during illness, and support with employee reintegration are just as important. These measures not only help reduce the financial impact but also increase the likelihood that employees can return to work in a responsible and sustainable way.

Does Your Current Arrangement Still Suit Your Organisation?

Many absenteeism insurance policies were taken out years ago. Since then, much may have changed. Your workforce may have grown, salaries may have increased, or the chosen deductible may no longer fit your current financial situation.

It is therefore advisable to review regularly:

• whether the insured payroll is still accurate;
• whether employer-related costs are adequately covered;
• whether the deductible remains appropriate;
• what support is available for prevention and reintegration;
• what the financial impact of long-term absence would be on your organisation.

Every organisation is different. A suitable absenteeism solution therefore starts with a clear understanding of both the risks and what you, as an employer, are willing and able to bear yourself.

Would you like to know whether your current absenteeism insurance policy still meets the needs of your organisation? If so, ask your insurance intermediary or broker to review your absenteeism insurance cover.