Posted By Sean Fraser
Interesting thread.
Over the last few months I have been quietly contemplating the percieved increase in flagrant lawbreaking of a minor nature - breach of the peace, underage drinking, incompetent driving (it gets very quiet in Scotland as winter draws near . . .!).
I came to the conclusion that it was lack of enforcement combined with a disdain for the penalties involved even if "caught". We can no longer seem to appeal to an individual's sense of decency as a means of encouraging them to be more community spirited and considerate towards others. Example - if an individual was allowing their dog to foul the pavement, then walks off, and is politely asked if they are going to pick it up (not needing to mention that the "illegal to foul pavement" sign is on the bin less than 5 meters away - likely response? - "What's it got to do with you?". Apart from being a concerned citizen, you mean . . .? The point is, what could I, as an ordinary individual, do about it? Police won't be interested, there are no wardens around, so what deterrent is there?
In terms of company compliance with the law (I got round to it eventually), the decisions are more often than not financial. What will it cost us to do this? More importantly, what will it cost us NOT to do it? And this is where I see the value in a pro-active approach from insurance companies. As we all know, there is less emphasis by the enforcement body (HSE) on inspections and more on preventive measures (eh?). So, not only are there going to be less "how are we getting on" visits, but the possibilities of anything other than a fatality prompting an investigating visit are getting lower (and reports are that even fatalities are not being investigated). No deterrent there then, unless or until the accident actually happens.
But prosecution is only one aspect of the consequences of poor management (I believe that safety, quality and environment are only facets of all good general management practice, not optional). The other danger is civil claim for compensation, and we should be clear that this is a much more likely prospect as a consequence of an accident than a prosecution. Who pays the costs and the penalty? The insurance company. So they base their premium cover based on a risk principle - and this is where a proven (perhaps certified) formal management system will reduce the potential risk of a payout needing to be claimed.
Of course, the company can run the risk of not having the mandatory EL insurance. This decision needs to be made knowing that they will carry the cost of accident that may include cost of civil and criminal court representation, compensation to victims, fine paid to court, and further fine for not having the mandatory insurance! In other words, for most organisations, the cost of failing to prevent an accident will probably mean liquidation - most should not survive flagrant abuse where cost was their ONLY consideration when deciding to operate without EL insurance.
Perhaps this is where the insurance companies can step into the vacuum created by a downgrading of HSE activities, promoting a preventive environment through risk mitigation. None of us believe we are going to have a serious accident related to our activities, certainly we never plan to have one - yet they happen, even in supposedly lower risk environments. Sometimes we don't realise the cost involved until it happens. Good education/promotion by the insurance companies would raise awareness of the probabilities, not just possibilities, of it all going so horribly wrong and the consequences involved. Therefore we are more likely to pay insurance premiums to offset that eventuality - but a poor management system will entail high risk and high premiums, whereas a good management system and corporate culture will reduce the potential for serious accidents occuring and hence lower risk means lower premiums - even for traditionally higher risk industries. Actual cost is reduced, with the assurance of full support should the unplanned and unexpected happen.
We live in a culture that is waking up to the possibilities of civil litigation - the danger of being dragged through court is increasing, regardless of prosection risk, and insuring against that possibility is vital - or go under. Lowering the premium payout is the goal for all - certainly, insurance companies like the high premium but hate the probability of paying out and would rather avoid it - thereby running the risk of the loss (in lives and money) should not be an option. Those that don't insure - hit them harder, and the others will fall into line. Risk = severity x possibility. High severity, coupled with high probability - still worth the risk?