Vigilance in risks can avert the crisis, says Hugh Price
The national press has picked up on a number of recent cases where apparently sound small to medium sized businesses have had to cease trading or lay off staff because of the unavailability of employers' liability (EL) cover at affordable premiums or at all.
The construction industry has been the hardest hit.
The problem is profitability or the lack of it. There are a number of reasons for this crisis, including an overcrowded market place, which drove premium rates down, combined with an increase in the numbers and amounts paid out in personal injury claims, all of which have resulted in huge underwriting losses. Add to this a reduction in investment income and disaster loomed, as proved by the dramatic collapse of Independent Insurance, a former major EL insurer.
Insurers are now concentrating on obtaining profitable premiums.
What is the answer?
Improved risk management is the key. Here brokers and insurers can play a major part in drawing on their experience of claims and establishing risk prevention standards for the different industries, be they construction, shops and offices or manufacturing. In this way insurers can help brokers identify good and bad risks and help those `remedial' firms in need of guidance.
Workplace claims will not go away, but by vigilant and effective risk management businesses can prevent or reduce the effect of such claims.
The insured must also understand that implementation of safety standards is paramount; paying lip service to it will not suffice.
The process is a continuing one - a journey, not a visit.
In this way the crisis can be averted, but only if businesses wake up to the need to prioritise the safety of their employees.
