Research from health and protection advisers Punter Southall Health and Protection (PSHPC) published today claims 15.6% of employees are unknowingly un-insured.
The research comes as PSHPC launches a self-serve platform called Gladis, which aims to reduce the employer risk of managing protection insurances for employees.
PSHPC examined the records of 19 of its clients and found 74% have at least some data error issues that could potentially leave staff un-insured should they need to make a claim.
Speaking at the Gladis launch event in central London last night, PSHPC sales and marketing director John Dean said: "The level of un-insured employees revealed by Gladis should be a wake-up call to businesses.
"The risk of self-funding life assurance is just too much for most companies - especially in today's economic environment."