The vast majority of companies operating in today's competitive economy view the standards of health and safety in the workplace as an essential part of business strategy. An organisation that is complacent about its workforce and fails to plan its operations effectively is running a serious risk.
If health and safety is compromised, the consequences can add up and result in considerable costs and damage to the business. Even a small incident with machinery and equipment can delay or interrupt the effective delivery of products and services to customers. A larger incident not only has consequences for those it immediately affects, but can also rock the confidence of the work force, damage the company's brand or corporate image and seriously compromise future business.
A company that deploys effective risk assessment procedures is more likely to avoid such problems. Engineering insurers working with brokers, can offer clients the added value of a risk assessment as part of a bespoke service.
The demand for this type of tailored service from engineering insurers is on the increase. They want solutions that address the particular requirements and needs of their business. This is particulary the case at the top end of the market. Risk assessment, driven by regulatory as opposed to statutory requirements, is a key specialist skill that delivers real benefits to the client. To fully appreciate the advantages of using risk management within the workplace, it is worth reviewing each of the main areas of concern.
Health and employee safety
The drive to improve the standards of health and safety for the workforce, across all companies, sectors and industries, should be seen as a positive challenge for business. An all-encompassing risk management approach reviews the dangers to employees posed by items of plant, equipment and machinery. The aim is to reduce accidents and save lives.
This is particularly pertinent when considered in the light of the recent publicity regarding corporate manslaughter law. It is accepted that risks can never be eliminated entirely, but they can be managed and reduced to an acceptable level. Even if the proposed corporate manslaughter legislation does not reach the statute books, it is still the type of responsible approach that most companies will want to adopt as part of a "best practice" approach.
Consequently, there is an increasing requirement from clients for engineering insurers to supplement their standard proposition with a risk management package. Businesses are taking an increasingly mature view in assessing the costs versus the consequences of not taking a positive approach to health and safety in the workplace. There is also recognition that a business reputation can benefit, both within its own industry and the public domain, if it can demonstrate such a proactive stance.
Similarly, downtime is not something that any company relishes. The loss of almost any type of machinery or equipment through complete or even partial failure can affect productivity. In extreme cases, the complete breakdown of a plant can have catastrophic results for the business' operations and its overall viability.
Due consideration to the risks of an interruption to the business should therefore be highlighted as a key concern to management. Independent third-party inspection, driven by statutory and regulatory requirements, has the benefit of providing a thorough and rigorous inspection and examination of the workplace. These examinations provide useful information for risk assessment purposes, and therefore can be used to analyse how the potential for unscheduled interruptions from failing or failed machinery can be minimised, or even removed.
The benefits of minimising business interruption are significant. The failure of even a small part of production can result in the loss of huge sums in lost orders. The knock-on effect can include: the loss of customers through failure to supply; the costs of breach of contract and the costs to outsource or acquire a nationwide alternative supplier. Effective risk assessment of resources, taking into account what the machinery/equipment is used for, its design and suitability for the use, the age and rate of use of the examined item, can minimise the chance of partial failure and breakdown.
Similarly, breakdown due to the catastrophic failure of a piece of equipment or machinery is likely to incur considerable capital costs in terms of replacement arrangements. Clearly, it makes good business sense to undertake contingency planning in relation to the potential loss of such equipment. The aim is to try and maximise output by protecting the means of production. It is not just a case of replacing equipment after the event. It may be possible to identify key pieces of equipment to which extra preventative measure should be supplied. For instance, they could be isolated, run in a different context or given extra protection to reduce the likelihood of failure. Fixed costs are normally irregular payments but involve larger sums than variable costs. Therefore, maximising the shelf life of capital equipment is a prime consideration in any business.
Status and reputation
As an organisation grows, it acquires a reputation and brand strength providing it with a greater appeal to its current and potential client base. This can arise through a reputation for efficiency, quality and delivery of a high level of service and products. A strong provision of health and safety in the workplace from a dynamic risk management approach reinforces the areas mentioned above.
Businesses should take a responsible approach to health and safety at work. Risk management has a key role to play in helping firms meet and exceed standards as set by statutory and regulatory requirements. Engineering insurers likewise can play a key role, working with brokers to help clients deliver positive health and safety environments, both to their employees and to the general public at large.
