The aim of employers’ liability insurance is to ensure that employing organisations are covered for any civil liability to pay damages to any of their employees who sustain bodily injury, or disease out of, and in the course of, their employment. Insurers, especially employers’ liability insurers, are keen to assess risks from an underwriting viewpoint in order to minimise the risk of liability claims of a safety and health nature. Clearly, this process of assessing the risk will vary from insurer to insurer, but the basic process is as follows. The insurance premium is calculated by the underwriter, who will take into account (among other factors) the nature of the undertaking, current and previous claims history, and the overall health and safety culture and management commitment demonstrated within the organisation. This aspect is generally provided for the underwriter via a risk presentation from either the insurance company’s surveyor, or the organisation’s insurance broker. Most insurance companies have teams of qualified and competent health and safety practitioners who, as part of the overall insurance package, will visit the insured organisation’s premises to undertake employers’ liability surveys on behalf of the underwriter. Their reports will contain health and safety recommendations designed to improve the risk. These are often put forward to the insured organisation for consideration and subsequent implementation. In certain cases, compliance with these recommendations is made a policy condition, and the continuation of the insurance cover will depend on the insured organisation demonstrating that the recommendations have, in fact, been implemented in practice. The employers’ liability surveyors will also report back to the underwriters on their general impression of the risk. Their risk assessment is generally communicated to underwriters as a numerical score generated by an agreed rating system. If the scores are high, the underwriter is able to look at the risk favourably and, in certain cases, will be able to offer premium discounts, thus rewarding positive effort by the organisation with financial benefit. If the scores are low, premium loadings may be invoked by the underwriter in order to cover for future potential losses. Areas of low scoring will be communicated to the insured organisation, together with details of where improvements in health and safety management need to be made, which, if implemented, will improve the quality of the risk and hence the overall score.DISCLAIMER
Every care is taken in the preparation of these questions and answers, which are supplied by Croner Consulting, a trading division of WoltersKluwer(UK) Ltd. Any advice or guidance contained herein is not to be taken as the official advice or guidance of IOSH or SHP/UBM. The information is correct at the time the answer was formulated and posted. However, the answers given can only address the general principles involved. Professional advice must be sought on any specific query or problem your business has relating to any issue or area raised.
