Don't risk it
21 Jun 2013
When you think of health and safety, insurance is unlikely to immediately spring to mind but as Steve Moullin, director of R.A. Rossborough (Guernsey) Limited, explains, the two are intrinsically linked.
We live in an increasingly litigious world and more and more companies are facing claims from employees, customers and third parties. According to the Association of British Insurers, £5.9 million was paid to customers each day in 2011 for liability claims such as accidents at work, professional indemnity and injuries to the public on commercial premises, a total of £2.2 billion. Of that, £744 million was paid to people who had been injured at work.
These claims are likely to have been diverse but many can be avoided by ensuring that health and safety is high on the management agenda. The implications of not giving it the attention it deserves can be huge and can impact any business operating in any sector.
Within the Channel Islands, it is a statutory requirement for any company with employees to hold Employers Liability Insurance. Such policies are written on an occurrence basis, which means coverage will respond to any incident that occurs (or that did occur) while the policy is (or was) operative, regardless of when the incident is reported or when a claim should arise.
Even if employers carry the correct insurance, it is often difficult to trace who the insurers were at the time of the incident several years later should a claim arise following injury or if people develop a disease through exposure to harmful materials in their work environment.
In the UK, 2012 saw the compulsory introduction of the Employers Liability Tracing Office (ELTO), which replaced the previous voluntary Employers' Liability Code of Practice (ELCOP) tracing service, which was in place since 1999. The insurance industry has introduced this to make it easier to search for EL insurance policies using a central database. Currently this does not exist in the Channel Islands and so it is vital to retain records.
The local Health & Safety Ordinance imposes a legal duty for businesses with five or more staff to implement a written health and safety policy, which needs to be communicated to all existing employees and should form part of the induction process. This bespoke document should cover all aspects of housekeeping and risk management and outline how the organisation manages health and safety as well as detail who does what, when and how they do it. It's also imperative to review the policy and ensure that someone has responsibility for it.
Companies also need to consider the health and safety of any third parties who have access to or visit them either at their own premises or external sites where work is being undertaken. Good risk management is essential to mitigate potential claims in this regard. Businesses cover such risks by purchasing Public Liability Insurance.
It is important that businesses check that their Liability policies cater for all aspects of their trade and that the Limit of Indemnity is adequate. All policies will contain conditions and warranties, some of which will often be a precedent to insurers accepting liability and so you must ensure you are fully aware of what is expected of you and that you are able to fully comply.
Should someone suffer an injury or damage to their property then this should be documented typically within the company's accident / incident book and record details of the event, injuries and damage caused and statements from any witnesses and action taken. All companies should retain a formal record of all incidents, no matter how minor they may seem. The Limitation Act 1980 allow claims relating to personal injury to be made up to three years from when injury is sustained or when the injured person has knowledge of damage, whichever is latest, and six years when damage results from the tort, with the exception of latent defects which is longer.
High profile criminal cases against companies across the Channel Islands who have been prosecuted by the relevant Health and Safety Executives are on the increase. All insurance policies will exclude the payment of any fines and penalties and so businesses will face hefty bills which they need to cover the cost of, as well as the unquantifiable reputational damage.
Companies can make the process simpler by using a reputable and experienced broker who can work with management to identify potential areas of risk, ensuring the insurance policies are both comprehensive and suitable for the company and its operations.
With claims on the increase, it is important to mitigate the costs involved in order to keep premiums at an affordable level and so the promotion of good risk management, training and communication practices can only assist and more importantly ensure the health and safety of islanders.