Actuarial consultancy Punter Southall has found evidence that HR departments are sitting on huge data inaccuracies that leaving staff un-insured, potentially meaning their companies are unknowingly holding millions of pounds worth of self-insured liabilities.
The firm has released software, Gladis, designed to sit between Insurers and employers that reduces the employer risk of managing protection insurances for employees.
Pre-launch trials of Gladis with 19 clients revealed 74% of companies have at least some data error issues that could potentially leave staff un-insured should they need to make a claim. On average 78 out of every 500 staff (15.6%) were not correctly insured should there be a claim.
Each company with 500+ staff is estimated to be holding £9.36 million -worth of un-insured liability.
The platform, Gladis, checks to see employees are correctly insured by identifying possible member eligibility issues, checks the composition of the workforce by cost centre, location etc. and forecasts protection insurance budgets.
The system does this based on monthly inputs of employee data which flags data inconsistencies, to show HR heads what needs correcting, updating or amending to ensure staff are covered in the event they need to make a claim.
John Dean, PSHPC Sales & Marketing Director, commented: "It is often only when a claim is made that data errors are exposed.
"The key problem is that insurers only currently receive employer census data once a year, and often HR departments don't know the data they need to regularly provide to ensure correct cover is in place.
"HR departments are sleepwalking into major problems should claims be made."
