04 Jul Employers: Why Your Company Needs WIBA Insurance?
Is your company considering whether to buy WIBA insurance in kenya or to carry it internally? This is a reasonable discussion that each company should have.
A critical look at the issues is the best way to decide on how best to handle it. At insureafrika, we believe that a company is better off buying WIBA insurance rather than attempting to carry this risk internally. Here are some of our arguments
WIBA Management is Cumbersome
Carrying WIBA internally complicates the operations of the organization. Any savings the organization may make by avoiding to pay premiums for a related policy will be wiped out by the cost of management of WIBA. The money will go into salaries for staff who will be managing WIBA related matters.
Secondly, the company will almost certainly need to retain the services of a lawyer or a lawfirm to navigate through WIBA. The administrative costs of WIBA can quickly wipe out the savings a company can make by not taking out a policy.
Carrying WIBA Internally can Complicate Financial Planning
When you consider the option of carrying WIBA risks internally versus transferring the risk to an insurance company, it is easier to see why financial reporting is a lot easier when you take out a WIBA insurance policy.
The employer’s liability insurance policy will be one expense item that is easy to account for. This is less complicated that reporting on various payouts being made to employees based on WIBA
The Impact of WIBA Related Risks is very High
In the event that there is an accident that affects a large number of employees such as a fire, a road accident, or any other situation that yields a large number of employees eligible for WIBA related compensation, the company can suffer. WIBA payouts can be as high as 96 months salary in some cases. While rare, this is a real risk in some work environments.
A WIBA policy is a better strategic bet that may seem expensive in the short term but can actually save a company from bankruptcy in the event a large scale risk event happens. Would you want your company to be one disaster away from extinction?
WIBA Risk Ownership Can make you Anti-Employee
The fourth problem with carrying WIBA internally is that it can make the company hostile to injured employees, which in turn will affect the performance of the company on aspects such as talent management.
When your WIBA liabilities are handled by a third party, internal politics will not have much impact on the compensation process.
You are also free to support your employees as they seek compensation from your WIBA insurer, and hence you will appear supportive to your employees. This will yield higher rewards for your company by increasing employee morale.