EMPLOYERS’ LIABILITY
Workable solutions are at hand
With claims rising, Stewart Gardiner, underwriting director at Fusion Insurance,
claims are upheld against
companies – and claims against
looks at how brokers can assist their clients
employers’ liability policies fail
- because there is no audit trail
work-related stress to RSI.
be focused on regenerating the
to prove that the business has
F
ew brokers would show
much surprise or alarm at
Health and Safety
business and restoring its
followed procedures.
marginal increases in the
Executive prohibition notices or
reputation and customer
It is in this area that
size and numbers of claims
prosecutions add further to the
relations. And there will be the
professional advisers, with their
during a recession. Fraud is
burden, especially with the
added financial hit when
knowledge of the details of the
always with us and it
Government’s passion for
premiums inevitably respond to
insurance contract, can provide
consistently raises its ugly head
tightening the fines regime,
the claims spike in employers
cost-effective support. The key
in hard times. But with this
presumably to bring in much-
liability insurance. Many SMEs
records are:
recession things appear to be
needed revenue.
may struggle to afford proper
● documented safe working
different.
There has long been
insurance cover.
practices and systems –
We’ve seen a
concern the compensation and
properly communicated to
disproportionate increase in
regulation culture is running
all staff
spurious motor claims as well
out of control and the impact
as an explosion in the size and
on businesses that are unable
S
o what is the defensive
strategy brokers should be
recommending? Clearly, in
● clear evidence of all risk
frequency of work injury and
to manage the risks effectively
the first instance, prevention is
assessments and action
employment-related claims.
can be devastating. Survival in
better than paying for the cure.
taken, including
Employers’ liability claims alone
an increasingly litigious society
Injuries happen more
investigations and reports
have risen by 100 per cent in
and managing exposure to
frequently in a low-morale,
following incidents
the past five years - the
injury and employers’ liability
poor-health-and-safety
● inventory of all protective
average cost of each case is
claims represent a growing
environment. Health and safety
equipment issued and
now in the region of £9,000.
challenge.
must become part of the
signed out
Evidently other recession-
Businesses need more than
corporate culture.
related factors are holding sway
just a basic insurance
● full account of the training
That does not mean a
here, which worsen the impact
programme. As profits fall more
programme, including on-
draconian regime cluttered with
of opportunistic fraud. In the
employees face redundancy -
the-job training and
daft rules and restrictions that
case of employers’ liability
companies can become trapped
activities such as ‘tool-box
everyone ignores, but rather a
claims, one of them is the
in a vicious circle of falling
talks’
policy that the whole company
compensation culture, which
staff morale and rising levels of
buys into. It entails a thorough ● full medical questionnaires
has shifted up a gear or two.
claims.
grasp of the legislation and
No win, no fee agreements
Managers should instead
codes of practice that apply to At Fusion, our experience
have drawn many more litigants the particular sector in which has been that clients welcome
into the arena and specialist the business operates, as well intervention and advice in
lawyers are marketing their as carrying out relevant risk setting up workable procedures
services more aggressively. If assessments, implementing and record systems. They see it
someone can be found to blame improvements and monitoring as a valuable trade off that can
for a corporate procedural effectiveness. substantially reduce time spent
omission or error, there is likely Proper training of staff and on the costly and complex task
to be a claim. their immersion in the health of managing a claim.
Other factors have thrown and safety culture will ensure And if, when a large claim
fuel on the flames: exponential that the benefits are properly comes along, the broker can
increases in damage awards; a understood and run right take much of the weight of off
proliferation of the procedural through the work force. their clients shoulders as they
hoops that companies now have Then there is record get the business back to
to jump through and new
Stewart Gardiner
keeping which is all too often working order, and build
sources of claims, ranging from
Underwriting Director
overlooked. Time and again increased loyalty.
Fusion Insurance
30 Insurance Brokers’ Monthly
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