New research from Marsh has revealed that a majority of employers believe risk management strategies have had a positive effect on reducing employers' liability (EL) premiums and associated claims.
In the summary of 52 companies, 38, or 73% indicated that risk management had a positive impact on EL costs.
Leader of the human capital risk management practice at Marsh, Barbara Dahill, said: "Our experience shows that organisations which take an active approach to managing employment risk reduce the number of serious workplace accidents.”
According to the UK's Health and Safety Executive, accidents, slips, trips and falls currently cost UK employers £512m per year and comprise 33% of accidents at work.
64% of those surveyed said they felt they could improve their systems to prevent these types of accident.
The greatest area of concern expressed by survey participants related to non-insurance costs associated with EL risk management.
These included salary costs related to sickness absence, cost of temporary replacement labour, additional overtime and employee turnover.
Approximately 58% of the organisations felt their company had not correctly identified the cost of sickness absence, while 72% were not confident their company had successfully identified the cost of replacement labour during an illness.
Figures from the Chartered Institute of Personal and Development estimate the cost of sickness absence per year per person is approximately £600.
Dahill said: “Most organisations realise the significant cost associated with compensation when an employee has an accident at work, but neglect to examine the costs of an ill employee and replacing them.
“The survey revealed 72% of respondents felt identifying the cost of sickness absence would make the biggest difference in managing organisation risk.”
