Mental health insurance

Insurance expert Ben Rickard shares insights on mental wellbeing from a business risk and insurance perspective 

There are two sides to the mental wellbeing coin for business owners. That of their workers and that of themselves. Looking after both is equally important!

Business owner wellbeing 

Stress is a key cause of poor mental health for business owners. Ultimately, much of this this is driven by uncertainty, or the potential for unexpected future events to disrupt the smooth operation of the business. For example, delays with a project or clients failing to pay their bills. If these events can be avoided, or if not avoided at least have contingency plans in place, a lot of this stress can be alleviated.

That’s why we advocate for businesses, large and small, to have an appropriately scaled risk management and business continuity plan in place.

This is a proactive approach to thinking about all the potential risks, by first identifying and prioritising them, then documenting the treatment plan. It involves working out how to minimise the chance of these unexpected events, then how to deal with them in the most efficient and cost-effective way if they do come up.

Having the right insurance is part of this plan, but so are many other things, like having good credit control processes and systems, back-up plans if things go wrong, well trained staff, a good accountant, a lawyer and business adviser on your side, proper contracts, payment claims and more.

Worker wellbeing

If staff are not happy this can lead to wider problems. Prevention is critical but let’s assume that the sh*t has hit the fan and a worker has taken a grievance against the business. 

They allege bullying, harassment and the poor environment on site leading to stress and mental health issues. They may also claim to not be able to work as a result and need to go on ACC.

The first point is that ACC doesn’t cover mental health claims in many common work scenarios.

According to their own guidelines, among other things ACC “…cannot provide cover for mental injuries caused by stress or other gradual processes at work…”

If that’s the case, it leaves the business open to a claim by the worker for compensation for any lost income or other uninsured treatment costs. This is where your Employer’s Liability insurance comes into play. This covers your liability for accident or injury to staff that is not otherwise covered by ACC, such as mental health.

There is a second type of policy, called Employment Disputes Liability, which will pay the legal defence costs and compensation (if awarded) in the event of a dispute going in front of the Employment Relations Authority.

The average claim cost in these scenarios is around $17,000 and they are becoming more common.

In a nutshell

Things go wrong – that’s life and that’s business. Having a plan can ensure that these unforeseen events are minimised and dealt with efficiently, reducing stress and improving business owner wellbeing.

If workers are suffering, this can also have blowback on the business — and if this happens, there is insurance available to protect you from potentially significant financial costs.

Builtin are New Zealand’s Construction Risk Management Experts. For more information visit builtininsurance.co.nz, email Ben Rickard at ben@builtin.co.nz or call the team on 0800 BUILTIN.