Employers who offer PHI as part of the benefit package must guard against unwittingly falling foul of the Disability Discrimination Act.
Most companies offering PHI will guarantee payment of salary for a maximum period. After this period has passed, the PHI insurer will provide a benefit, usually two-thirds of their salary until the incapacity ends or until normal retirement age.
Under new legislation, disabled people cannot be excluded from such a scheme if they can prove that collegues who are not disabled would have been accepted. The underwriter, however, may wish to radically screen new entrants and may not admit liability for a claim.
“Companies who word their contracts in this manner may find themselves liable to bear the costs themselves”, warns David Holland of R.K.Harrison Financial Services.