Insurance coverage is a priceless avenue to securing a business against loss, whether with respect to the actual business performance itself or damage or loss to the company’s assets or tools. The question of human capital also being insured comes into the fore since a company’s staff is in a manner of speaking, it’s most valuable asset. It is very common in today’s corporate world to see staff provided different types of insurance by their employer.
IS A BUSINESS REQUIRED BY LAW TO PROVIDE VARIOUS TYPES OF INSURANCE COVERAGE FOR IT’S STAFF?
While it is common for companies to provide certain kinds or types of "employee benefits" coverage for workers such as general health, dental, and similar coverage, the law generally does not require a business to do so for all, but specifies a few that with the enactment of some relevant acts have become mandatory. These include:
In line with The Workmen’s Compensation Decree of 1987 all businesses must provide Workers' Compensation coverage for the benefit of their employees who may be injured or incapacitated while on the job. This is a requirement of the law in Nigeria. This requirement is satisfied by purchasing Workers' Compensation insurance, which is available from private insurance companies that are licensed by the National Insurance Commission (NAICOM). This law applies compensation to four types of mishap viz:
Permanent partial incapacity
Permanent total incapacity
Fatal accidents, where death results
It is worthy of note that the law creates exceptions to this general rule in cases where compensation cannot be claimed by the affected worker.
The National Health Insurance Scheme Act
This act requires that an employer who has a minimum of 10 (ten employees) must register them to contribute to the scheme. Though this scheme is not directly linked to safeguarding the business from economic liability, it is a policy prescribed by the government and must be followed by all employers that it applies to.
Pensions Reform Act of 2003
Section 9 )3) of this law requires every employer to maintain a Life Insurance Policy in favour of an employee for a minimum of 3 times the annual total emolument or pay of the employee.
With regard to other insurance coverage such as dental, general health and similar types, most businesses provide these and similar benefits to attract and retain good employees and as an additional form of compensation. However, businesses that employ unionized workers must provide whatever benefits are required by the terms of their union contracts, and it also may be necessary to provide certain types of employee benefits as a condition of doing business with or for certain governmental entities or agencies.
Benefits of Employee Insurance
The effect of such on a worker’s morale cannot be overemphasized. It is in truth an excellent form of motivation for a line of work that may or may not be high-risk. Oil companies are known to provide wonderful incentives to their field staff, especially those who are engaged in work on oil rigs and related assignments including pipeline maintenance. As these benefits are continually being added, the provision of certain types of insurance for employees may, in addition to an attractive salary may be one of the most important factors considered by would-be employees in choosing which job offer to accept.
Employee insurance policies can be bought in favour of employees from any Insurance company licensed to do so by the National Insurance Commission.