Consequences of not taking out sick leave insurance
Taking out sick leave insurance is not required by law. As a business owner, you decide which risks you want to insure and which you do not. One of those risks is employee absenteeism due to illness. The more employees you have, the greater the financial risks. Are you still unsure about taking out sick leave insurance for your organization? Then it’s a good idea to consider the consequences of not taking out sick leave insurance. In this article on Alpina.nl therefore listed a number of potential consequences for you.
Possible consequence 1: You cannot afford the costs associated with absenteeism
The costs associated with employee absenteeism due to illness can be high. On average, an employee on sick leave costs €250 to €300 per day. The largest expense related to sick leave is the continued payment of wages. In the Netherlands, an employer is required to continue paying the wages of an employee on sick leave for two years. This must amount to at least 70% of the gross wage. Many collective bargaining agreements (CBAs) stipulate that you must continue to pay 100% of the salary during the first year. However, this can vary depending on the specific CBA. In addition to the obligation to continue paying wages, you will also face other costs, such as absence support and reintegration. You may also experience a loss of revenue or production, and there may be costs associated with hiring replacement staff. All in all, the costs can add up significantly, especially if your employee is on long-term sick leave or if there are multiple employees on long-term sick leave. With sick leave insurance, you can cover this financial risk.
Possible consequence 2: Bankruptcy
The costs associated with an employee on sick leave can therefore add up quickly. For small organizations in particular, it is not always easy to absorb these costs—especially if multiple employees are on long-term sick leave. Without sick leave insurance to cover these costs, you therefore run the risk of eventually having to file for bankruptcy.
Should I get sick leave insurance or not?
Are you still unsure about taking out sick leave insurance? Then take a close look at your company’s financial capacity. If an employee is on long-term sick leave, this entails significant costs. Suppose several employees are on long-term sick leave—can you absorb the costs of their absence on your own? When calculating these costs, include not only payroll expenses but also the costs of absence management, reintegration, and any necessary replacement staff. The premium for sick leave insurance may seem high, but the costs associated with a sick employee are often much higher. If your organization cannot or does not want to cover the costs of one or more sick employees, you may want to consider sick leave insurance.
Request a no-obligation quote for sick leave insurance at Alpina.nl
Before you purchase sick leave insurance, you naturally want to know how much the premium will be for your organization. You Alpina.nl request a quote at Alpina.nl with no obligation. To do so, we’ll need some information about your company. The quote will include an overview of the various insurance options. This makes it easy for you to compare sick leave insurance premiums yourself. Did you know that the premium for sick leave insurance is reviewed every year? The insurer checks whether your company’s details have changed and whether there have been personnel changes, which could, for example, alter the age distribution of your workforce.
Do you have any questions about sick leave insurance? Please don’t hesitateto contactus! You can reach us by phone Monday through Friday from 8:00 AM to 6:00 PM at 0800 – 688 37 12. Of course, you can also always send us a message via chat, WhatsApp, or Messenger.
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