How to choose the right insurance for your employees in Africa?
There is a lot to consider when it comes to selecting an insurance company for your employees, especially in Africa where information is not always readily available. I am not talking about compliance only, but rather the well-being of your staff when your business must cope with the unexpected.
In every organisation the welfare of employees is important. Employees are running the business on a day to day basis. Therefore you should pamper them and consider seriously their insurance schemes.
There are a few things to consider when choosing insurance for your employees in Africa.
- Find a good insurance broker
- Do a background check on the insurance broker and the insurance company
- Consider the options you would like to offer your employees
- Negotiate the terms
Find a good insurance broker
I know you may be asking yourself why I decided to use “insurance broker” instead of “insurance agent” or “insurance company”. Let us have a brief introduction, an insurance agent is licensed to handle products from a specific insurer only and is not required to have a professional indemnity. This means that the clients are more exposed to risk. The downside to this is that you only get one option, sad right?
It is important to note that insurance brokers are trained and have a vast knowledge of the insurance market. Brokers are also part of a professional body with strict requirements to get a license (i.e.: professional indemnity cover and staff with professional experience). They deal with various insurance companies and are in a position to advise you on various products. Did I mention that they give you the best rates and their remuneration is include in the cost of the policies? This gives you an opportunity to pick which fits your employees’ insurance needs. In case of accidents and there is a claim to be made to the insurance company. The brokers are in a better position to negotiate on your behalf and save you the stress.
When finding a good insurance broker most of us will do a Google search and see the companies available. After this I would recommend making contact like checking through their social media platforms. Other forms of communication like calling would also work depending on your location.
After all the above steps, you will have narrowed down your options to a handful, from here we can move to our next step
Do a background check on the insurance broker and the insurance company.
What do I mean? First, check if the insurance broker is licensed to operate in the said country. For example, In Kenya we have the Insurance Regulatory Authority (IRA). Mandated to regulate, supervise and develop the insurance industry in Kenya. The authority also handles the licensing of insurance brokers. In Uganda, the Insurance Regulatory Authority o Uganda is tasked with the same mandate.
Second, check the website carefully and read through it then confirm whether the address given on the website matches a physical office. Why? Because not everybody is trustworthy. Some people will put up very nice profiles of companies and use them to swindle unknowing clients.
Third, call the company and book an appointment, if they give you a date and time great! Prepare all the question you think they should answer, everything including what you think is irrelevant. You can do this with a few of the companies until you get what works for you.
Consider the options to offer your employees
There are options to consider when it comes to choosing the right insurance for your employees in East Africa. Some include: Workmen Compensation Insurance (called WIBA in Kenya), group personal accident, group life cover and medical cover. Let’s have an in depth look at the above covers:
Work Injuries Benefit Act (WIBA) – This is an Act of parliament in Kenya that was enacted to provide for compensation for work related injury or disease contracted in the course of their employment. In Kenya it is mandatory for employers to obtain this cover. Note that, in case of death of permanent total disability, the employees are entitled up to 96 months of salary. This means you will also have to check the limit per person / per accident of the policy and confirm it’s enough to cater for 8 years salary.
Group personal accident – This type of cover is taken as an extension of the Work Injuries Benefits (WIBA). It to cover the employees for 24 hours. This means that the employee is insured under the cover whether they are at work or not. This policy caters only for accidental (not to be confused with a medical policy).
Group life cover – This type of cover is taken cover employees in case of death caused as a result of an accident or natural causes.
Medical cover – This type of cover is taken to cover medical needs which include optical, dental, and maternity and others. It also includes the employees’ beneficiaries. The cover may have a limit as to how many beneficiaries can be added onto the cover.
After understanding all these steps, it is up to you the employer to decide on the right insurance for your employees and the right premium. Afterwards you can decide on the next course of action.
Negotiate the terms
For this step most insurance brokers will give you the the terms and conditions of their company so that you can enter into an agreement.
Finally, you have settled on the right insurance for your employees in East Africa. It is time to approach your broker of choice and inform them of your choice. At this point, the broker with then ask you for details like: the number of employees and the estimated annual earnings.
The broker will then go ahead and negotiate with the insurance company on your behalf and ultimately get you the best deal possible. Afterwards the broker will then give you the figure for the premium to be paid annually. Oh! Point to remember, if you take up an insurance cover, remember to renew it on time so that your employees remain safe.
To sum up, if you are planning to establish in Africa, it is of utmost importance that you study the labor laws of the country so as to understand the provisions of the law. E.g. Are there any mandatory insurance policies that should be taken out for employees?
If there are mandatory insurance policies, what are the steps that should be taken to ensure that you are running your business in accordance to the laws of the said country?
Afterwards you can choose among the other types of insurance and decide on which one to choose for your employees. It is however important to have an expert in the same offer you valuable information. This way you avoid being swindled and wasting time.
Finally, after taking care of your employees do not forget that your business also needs insurance against fire, theft, etc. Maybe we shall discuss in our next article right?