Potential insurance coverage implications of a four-day workweek

By Jack White
April 12, 2023 at 08:29 AM

Whereas a shorter workweek sounds interesting, small enterprise house owners ought to take into account a number of components earlier than implementing this alteration.

We’ve been listening to much more today concerning the concept of the four-day workweek. For instance, from January to June 2022, Scotland performed a trial experiment operating a 100-80-100 mannequin. The trial “succeeded,” based on Scottish authorities, and a number of other companies elected to proceed utilizing the mannequin.

In the USA, the Thirty-Two Hour Workweek Act was reintroduced by Rep. Mark Takano

in the USA Home of Representatives in January 2023, after not passing in 2021. The invoice proposes a discount in the usual workweek to 32 hours, or 4 eight-hour workdays, with no discount in pay or advantages for workers.

In keeping with Digital.com22% of enterprise house owners surveyed in 2022 mentioned they might strongly take into account altering to a four-day workweek, and 13% surveyed mentioned they’re at the very least considerably contemplating the transfer.

The concept of a four-day workweek has gained traction, with some saying it might assist improve work productiveness, scale back burnout and probably enhance work-life steadiness. Whereas this will likely look like a win-win state of affairs for each workers and employers sooner or later, small enterprise house owners could need to take into account the potential insurance coverage implications if such a change have been applied.

In the case of insuranceit could present protection for a variety of dangers related to property harm, legal responsibility claims and different potential losses that may happen whereas operating a enterprise. Small enterprise house owners rely on insurance coverage to assist them shield their belongings and operations from unexpected occasions that may trigger monetary losses. Nevertheless, altering the work schedule from a five-day to a four-day workweek might probably have an effect on the dangers related to small enterprise operations, and thus insurance coverage protection.

For companies that make use of an in-person mannequin, one sort of serious change {that a} four-day workweek might carry is a rise in foot visitors. For instance, if a retail retailer that beforehand operated 5 days per week decides to shut on Wednesdays, the remaining 4 days will possible see a better quantity of shoppers. This improve in foot visitors can increase the danger of losses, theft and property harm, akin to shoplifting. Conversely, having an elevated interval the place a retail store is closed might result in an increase in vandalism. Due to this fact, small enterprise house owners ought to overview their property insurance coverage insurance policies to make sure that they’ve the protection they need for these new dangers. This may occasionally contain growing the coverage limits, including endorsements or riders to the coverage, or buying extra insurance policies to cowl particular dangers.

Legal responsibility insurance coverage is one other vital facet to contemplate when transitioning to a four-day workweek. With fewer workdays, the legal responsibility dangers related to the enterprise could change. As an illustration, a restaurant that beforehand operated 5 days per week could now have longer hours and better buyer quantity on the remaining 4 days. This elevated exercise can increase the danger of accidents, akin to meals poisoning, slip-and-fall accidents or alcohol-related incidents.

Because of this, small enterprise house owners ought to overview their legal responsibility insurance coverage insurance policies to make sure that they’ve the protection they need for these new dangers. This may occasionally contain growing the coverage limits, including protection for brand spanking new actions or companies or buying extra insurance policies to cowl particular dangers.

Along with property and legal responsibility insurance coverage, small enterprise house owners also needs to overview their employees’ compensation insurance policies when implementing a four-day workweek. With fewer workdays, some workers could also be working longer hours, which might improve the danger of work-related accidents or sicknesses. Due to this fact, it’s essential to make sure that the employees’ compensation coverage supplies protection for potential dangers related to the brand new schedule.

Small enterprise house owners also needs to talk the adjustments of their work schedule to their insurance coverage agent or supplier. This may allow the insurance coverage supplier to evaluate the brand new dangers related to the four-day workweek.

Transitioning to a four-day workweek can supply quite a few advantages to small enterprise house owners, akin to improved worker productiveness and diminished burnout. Nevertheless, it’s important to contemplate the implications of this alteration on the enterprise’s insurance coverage protection.

Small enterprise house owners ought to overview their insurance coverage insurance policies with their brokers or supplier, assess the brand new dangers related to the four-day workweek, and make any needed adjustments to make sure that they’ve the protection they need for his or her operations. By taking proactive measures, small enterprise house owners can assist mitigate potential losses and assist shield their belongings from unexpected occasions.

Jack White is the Head of Industrial Gross sales & Advertising for Farmers Insurance coverage.

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