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An article in iNews (May 31, 2019), featuring comment from Dr Punam Krishan

Workplace Burn Out: a Business Risk to Consider

Jun 2019

An article in iNews (May 31, 2019), featuring comment from Dr Punam Krishan, has highlighted the growing health issues associated with burn out, which the World Health Organisation (WHO) has just categorised as a serious health issue.

WHO described burn out as a “syndrome conceptualised as resulting from chronic workplace stress that has not been successfully managed.”  Whilst it has not yet classified it as a medical condition, that could happen sooner rather than later, given the rapid prevalence of the syndrome.

Dr Krishan says she is signing off two patients per day with burn out, which can manifest itself in the form of profound fatigue, irritable gut, palpitations, mood disorders, depression and frequent viral infections.  These are the impacts of a world in which workers and managers are contactable 24 hours a day, with lines between work and leisure having become extremely blurred.  The pressures to perform, excel and exceed targets have never been greater.

But what does this mean for UK businesses? Apart from the obvious implications in terms of general sickness absence, top management and business owners should be looking at the issues of burn out, analysing their business in terms of who is integral to its successful operation, and then asking themselves a “what if?” question.  That question should relate to how the business could continue to operate, if a key individual – which could be themselves – were not able to work for some period of time.

This is the reason why keyman or keyperson insurance exists.  Most businesses or organisations have at least one person with unique talents, expertise or responsibilities that make them almost irreplaceable.  If that person unexpectedly falls ill, the business operation could be placed in jeopardy, unless steps are taken to mitigate the risk.  Keyman or keyperson insurance does just this.

The insurance policy names the individual who has the all-important expertise, skills, or contacts and pays out if that person falls ill, or unexpectedly passes away.  The money from the policy can be put towards the costs of sourcing and recruiting someone who can step in, or those incurred in training a replacement. It could finance a phase of business transition, to overcome the gap in knowledge or expertise that has emerged, or even compensating the business for losses of income resulting from the temporary or permanent absence of the key person. 

For many businesses, particularly those which are owner-run and within which the customers or clients often have a personal relationship with that one person, keyperson insurance could be regarded as a vital safety-net.  However, if other businesses analyse their operation, they too often perceive the danger that exists through the over-reliance on one key individual.

Given their crucial role, those who would be named on such a policy are probably the most likely candidates within a business to suffer the burn out and exhaustion that WHO has identified.  If you recognise you need key person protection, to safeguard against the impacts of losing someone vital to your business through ill-health, or from those emanating from your own absence, please refer to our ‘Find a Local Broker’ tool to help identify a broker who can work with you to get this type of insurance cover in place.