Small companies can incur benefits by providing employees with private medical insurance (PMI), it has been claimed.
According to Jonathan French, spokesperson for the Association of British Insurers (ABI), firms with a limited number of staff can be hit badly if one goes off on long-term sick leave.
He identified two main factors behind businesses taking out the insurance cover.
Mr French commented: "Firstly, [PMI] can act as a business management tool to help ensure that staff absence through illness or injury is kept to a minimum and, secondly … it is seen as a tool for the recruitment and retention of staff."
The expert went on to say that there are "plenty" of insurance providers that are able to produce a package that is both affordable and appropriate for small firms.
Figures produced recently by the ABI suggested that the number of people covered by PMI has broken the six million mark for the first time in five years, standing at 6,004,000 in 2007.