TaxBites – January 2015

In our last edition of 2014, we recapped prior topics such as the value of your Professional Corporation, the concept of Individual Pension Plans, and Private Wealth Counselling. In this edition, we’ll turn our attention back to risk, as we consider the impact to the business of injuries or illnesses incurred by team members and what you might want to do about that risk.

WSIB and the Professional Practice Exemption

Most employers in Ontario must register with the Workplace Safety and Insurance Board (WSIB) within 10 days of hiring their first worker. But the short and somewhat incoherent list of businesses that are not required to register with WSIB covers many of our clients when it exempts “offices of lawyers, dentists, medical doctors and veterinarians”.

Given the exemption, and the horror stories associated with dealing with WSIB, the vast majority of our clients do not voluntarily register.

My patients/clients are protected… aren’t my team members too?

Sometimes owners will say to us “I don’t have WSIB, but I have a commercial general liability policy that covers me if a client or patient is injured in my office and sues me for compensation. Wouldn’t that cover a staff injury too?” Unfortunately the answer is no. Typical general liability policies do not cover you for a lawsuit launched by an employee injured on the job.

Of course, employees are free to buy an individual disability plan; injury-only or injury and illness plans exist for most occupations. But we usually find that staff members of professional practices, including contract employees such as hygienists, do not have any disability coverage.

Whose risk is it anyway?

Some owners are comfortable with the fact that it’s an employee’s responsibility to mitigate their risk of an illness or injury. Employees are told that there is no WSIB coverage at work and can make an informed choice about whether to personally address the risk.

But ask yourself, if a long-term employee was diagnosed with cancer and could not work, would you terminate them once their sick days were used up? If a team member was injured on the job, would you be comfortable laying them off knowing they had no disability coverage? Or would you keep him or her on payroll “for a while”? How would you decide when enough is enough? If you think you would feel responsible (and would act accordingly), then it makes sense to look at options before something bad happens.

OK, so what can I do?

Here are four ways to address this concern:

  1. Voluntarily register for WSIB. This will address injuries at work but not illnesses or injuries that occur elsewhere. Coverage is relatively inexpensive but very limited. Registering with WSIB opens you up to safety audits and de-registering is apparently difficult. Voluntarily signing up for more government red-tape is anathema to most of our clients, but if you want to check it out… www.wsib.on.ca
  2. Develop a clear HR policy for all staff that indicates that there is no WSIB coverage and that they should obtain disability coverage personally. We would recommend a clear statement that if an employee is sick or injured and unable to report for work beyond a certain number of days, their employment will be terminated in accordance with the Ontario Employment Standards Act. Feel free to call us and we will share our experience on this issue.
  3. Help your staff to obtain information on individual coverage options. Perhaps if you provide encouragement and information, you will feel that you have done your part and can move ahead with a clear conscience and implement the HR policy described above. We can work with you and individual team members.
  4. Enroll your practice in a group insurance plan with a Long Term Disability and/or Critical Illness benefit. There are cost-effective options for even the smallest groups. In most cases, a minimal amount of disability coverage will be available without the employees needing to provide any medical information. Plans typically offer some health benefits as well as disability, but there is flexibility. Call us and we can explore your options.

Closing Thoughts

Business owners have a lot on their plates. But survey after survey shows that hiring and retaining good staff is right at the top of the list of challenges faced. It’s tempting to look the other way and ignore the risk of staff injury and illness, but taking an active role in the long-term health of employees is good for your team and good for business.

Feedback, Comments, Questions

We hope you found this edition interesting and useful. We invite your feedback, comments and questions on any of the above.

The next edition of TAXBITES will discuss a new concept in the Canadian retirement savings landscape, the Personal Pension Plan. If you want to check it out right now, there is a good article here from the January 29th Globe and Mail.

Todd Roberts, B.Com.
Vice President
PROTECT Insurance Agencies Inc.
101 Duncan Mill Rd., Suite 103
Toronto, ON M3B 1Z3
Tel: 416-391-3764, ext. 233
Toll free: 1-866-919-3764
Fax: 416-391-5451
E-mail: todd.roberts@protectinsurance.ca
Website: www.protectinsurance.ca
The views expressed in this commentary are those of Protect Insurance Agencies Inc. (Protect) at the date of publication, are subject to change without notice, and are not represented to be error free. This commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific insurance products or investments, nor is it intended to provide tax, legal or accounting advice in general or specific to your circumstances. Buyers should review all documents relating to any insurance or investment carefully before making a decision and should ask their advisors for guidance based on their specific circumstances. Protect assumes no responsibility for how you use the information you obtain from this commentary. E. &. O.E.

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