Employers are required to have insurance to pay out for their legal liability if one of their employees is injured or becomes ill as a result of their work. However, soaring premiums have meant that many employers have been unable to obtain or renew their cover, and this applies in particular to those in the construction industry, such as roofers and scaffolders.
But the penalties for not having insurance have been strengthened and according to Mike Williams, chief executive of the British Insurance Brokers’ Association, you could be fined up to £2,500 a day – and that’s just for starters. The following will help you to identify steps you can take to help reduce your liability insurance.
It pays to prepare
The earlier you start talking to a broker, the better. Keep a record of your full underwriting history so far to hand, if applicable, as the more information you can give your insurer about potential risks, the better off you will be. If there were any risks noted, consider whether these could have been improved and how.
You should also consider what could go wrong, identify who could be affected and how, decide what you would do to address the situation, record your findings and regularly review this assessment. The Health & Safety Executive (HSE) offers a free online risk assessment service, to help illustrate the potential costs of a workplace accident.
“Show your commitment to health and safety by visiting websites and gathering as much information as you can. It helps to be seen to be doing something about it,” says BIBA’s Williams.
If you are in an industry that is perceived to be more risky than others, find out whether there are any industry initiatives that can help you to negotiate a special deal.
Dealing with renewals
If you are renewing your insurance, begin the process early, ideally at least three months before it expires. This will give you enough time to inform your insurer if you think you will have difficulties meeting the costs.
If all else fails and you can’t reach a satisfactory conclusion, ask your insurer to extend cover, which would normally be for 7 or 14 days, and if you are lucky, up to 21 days.
“Try and offer your broker other business to insure, such as motoring and housing insurance. Sometimes combined policies can be more effective and cost-efficient,” advises Williams.
Try to agree to phase increases in your premium over a period of time, so that the cost does not hit you so much in one go. If you can agree, for example, a period of three years with your insurers, the costs will be absorbed over a longer period of time.
As David Williams, casualty manager at Axa Insurance points out, it’s not so much the risks that are important, but how well you can cope with them.
“Saying, for example, ‘we are aware of these risks’ simply isn’t good enough. If you are working in the construction industry, for example, making people sign for personal equipment will get you a tick in the right box, as it makes people who are signing more aware.”
If you have a staff handbook, ensure that it is regularly updated, and that your employees are aware of these changes.
The following tips from Axa Insurance can help ensure you are monitoring risk in your workplace.
- Observe the instructions on the warning notices displayed around premises
- Report accidents, breakdowns, defects and near misses to your supervisor
- Switch off and unplug portable equipment and flexible cables when not in use
- Keep areas around machines, gangways, steps and stairs clear and unobstructed
- Keep fire exits clear