Dave Honeyman, Executive Head: Accident and Health at SHA
Regardless of safety measures, the risk of an employee getting injured at work is ever-present in any business. Indeed, recent research by SHA Specialist Underwriters has shown that nearly a third of corporations had to deal with the serious injury or death of an employee because of a work related incident in the last three years. In spite of this, many businesses are still dangerously unprepared for the aftermath of an employee injury.
This is according to Dave Honeyman, Executive Head: Accident and Health at SHA, who says that business owners must educate themselves on the Compensation for Occupational Injuries and Diseases fund (COID) claiming process, have adequate personal accident cover in place, and consider the additional responsibilities that they have towards their employees.
He notes that there is an alarming trend of businesses circumventing the COID claims process. “If a business owner has to send an employee to the hospital after an incident, there is usually an upfront payment that the business must make, which can be claimed back from COID. However, many businesses find that claiming from the fund can be complicated, and it can take between 6 and 12 months to be reimbursed. As a result, many business owners don’t want to lose time on additional admin, and often choose not to report an incident to COID.”
However, Honeyman stresses that this is dangerous for the business. “If the employee experiences complications from an injury that was not reported to COID, the employer could be liable for all future medical costs. This could potentially run into tens or hundreds of thousands of rand.”
He explains that even seemingly straightforward injuries such as fractures or bone breaks can potentially develop severe complications months (or even years) down the line, leaving the employer liable for accumulated medical costs that could ultimately close the company’s doors. “COID removes this risk by covering the employee in perpetuity for all future costs related to the reported injury – but claims must be registered within seven days of the incident occurring.”
Honeyman notes that there is a solution for despondent business owners. “Comprehensive personal accident policies are an absolute asset to a company. Many of them offer access to accident expert services as an add-on. It puts the employer in contact with service providers who deal exclusively with issues like COID and road accident claims.”
These service providers assist with the submission of accident reports, and ensure that the claims are processed timeously. Having an expert on hand that can follow up on COID claims can effectively reduce the wait time from a year to three months.
Honeyman also points out that most small and medium companies do not have income protection in place for staff. “Keep in mind that most career-ending injuries and deaths occur outside of work hours, with the overwhelming majority of serious injuries and deaths resulting from road accidents that happen on the employee’s commute to or from work. Over a quarter of the businesses surveyed by SHA saw one or more of their employees injured in a motor accident in the last three years.”
He argues that a business owner’s responsibility towards employees stretches beyond work hours. If an employee is seriously injured after hours or is diagnosed with a serious illness, the company will be faced with a difficult decision as to whether they continue to pay the employee or not, which could result in a moral or reputational risk. “Workman’s compensation pays out 75% of an injured employee’s salary up to an annual earning of R458 520, anything over and above this can be paid out by a Personal Accident policy.
Additionally, companies should also consider the risk that the sudden death or disability of a team member poses to the rest of the organisation. “Given the ongoing skills shortage in just about every market sector, the sudden loss of a senior team member or skilled individual, may well place the rest of the business in jeopardy. This is why key man cover is becoming increasingly important. It helps the business to buy out skilled professionals from existing contracts or provide sign-on bonuses if an organisation urgently needs to replace a lost team member for the sake of its continued operation.”
“There is a very real need for companies to change their attitudes towards COID and other invaluable resources for their employees. If employers are not familiar with the processes and available resources around injuries on duty, they could make poor decisions that not only damage the business, but also negatively impact employees,” Honeyman concludes