Good health and safety management is obviously important to prevent workplace injuries ill health and to prevent companies being prosecuted. A recent report from AXA Insurance has highlighted the need for businesses to have robust health and safety systems to help reduce costs.
The report states that almost a quarter of small and medium-sized businesses (SMEs) have had an employee or former employee submit an Employers’ Liability claim in the past five years. Half of respondents said they have experienced an increase in premiums over the last five years.
Indeed industry data shows that the number of firms subject to an Employers’ Liability claim has risen sharply during this period, which has, in part, driven this rise in premiums. This is despite the fact that the number of reported workplace injuries and accidents has fallen.
The AXA research does suggest that employers believe there is a compensation culture in existence helping to drive these claims and it is likely that the upward trend in Employers’ Liability premiums is likely to continue. Professor Christopher Parsons from Cass Business School commented that “Considering the increasing size of injury awards, which have consistently outstripped both earnings and general inflation, further rises in Employers’ Liability premiums seem likely even if accident rates continue to fall, as Employers’ Liability claims are more attractive to injured workers and are easier to make.”
The Health and Safety Executive (HSE) has estimated that the ratio between insured and uninsured costs arising from accidents lies in the range of 1:8 to 1:36. So in the worst case, for every £100 recovered from the insurer, the business loses about £3,600.
As well as the legal requirements in place insurers want employers to identify and manage risks before an incident occurs and a claim is made.
Research shows that many SMEs will appoint a safety consultant to help with their safety but a number of these consultants do not have any professional qualifications and may employ the goal of eliminating all risk from the workplace rather than setting a proportionate approach to dealing with the Health and Safety at Work Act and other legal requirements. Many larger organisations also take this approach where a proportionate approach would be more effective.
In order to manage risks effectively it is vital to identify the real risks facing the business, including the less obvious ones such as lack of effective communication, management involvement in safety, or monitoring safety performance.
Cardinus safety consultancy division is now working with many SMEs, insurance companies and larger orgnisations to develop safety management systems based on a proportionate approach through prioritising identified risks and setting a safety programme of controls and improvements.
The approach involves employee and management involvement to help identify and prioritise workplace risks and develop agreed controls for their management. This is proving to be a very effective way of improving safety management and hopefully one that see less pressure from potential Employers’ Liability claims and that has got to make business sense.