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Posted By AJM
I recently had a visit from an insurance inspector with regards to our insurance being up for renewal. He asked a lot of questions regarding how me and us as a company manage safety and how important it was to have a person fully dedicated to safety.
He seemed impressed but i also got the distinct impression that by having this sort of safety management it would make a big reduction to what the insurance will cost. So I wondered if anyone has experience of how much a company could save by having a safety full time person in other words are what companies save actually paying for having us there in the first place regardless of all the hidden benefits.
Hopefully someone will have some idea of what savings they have incurred as this could be used as a good argument for having a full time safety professional.
Alan.
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Posted By Merv Newman
A,
a lot depends on your situation and your industry. It sounds a bit daft, but can you risk assess it ?
I tend to recommend that an "average" manufacturing site of 500 employees could do with a full-time person. Someone with appropriate qualifications and/or experience.
Much less than that and the post can be occupied by a "part-timer" i.e. someone with other responsibilities such as quality, HR, environment or similar. But that person would need some training towards a qualification. And an ENORMOUS pay rise.
Your insurance person may have been referring to a Safety Management System such as the BSI system OHSAS 18001.
And I sincerely believe that the whole thing is cost-effective. Direct and indirect costs of a typical accident run into thousands of pounds, without figuring criminal and civil liabilities. You are, it sounds, insured for the "civil" bit but would not be for the "criminal" bit.
How many accidents are you having each year ? Do the sums and you can probably see savings of much more than one employee's annual cost to the company.
Get management commitment to the importance of not having any more injuries and to managing H&S systematically and you will eventually see considerable financial return. And there are many other benefits than just the financial ones.
You may want to contact someone on the IOSH register of safety consultants to get further advice on this and in relating it to your specific circumstances
Merv
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Posted By The toecap
We have saved £10k per month in insurance premiums. There's two of us in a 250 person construction org. We didn't get a bonus last year
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Posted By Pete48
AJ,
Of course, as safety professionals we must always promote adequate and competent H&S advice and guidance for all employers because we know that with that guidance it is possible to improve H&S performance. As you question, one of the ways to justify the costs of that guidance is to use lower insurance premiums.
However, what reduces insurance premiums is more about a good or low injury and accident performance set against the business sector in which you operate. Thus, if you are already on low premiums due to the risk rating of your business, it will not necessarily reduce any further.
Having safety management systems and a positive approach to H&S, usually led by a safety manager or "champion" in smaller businesses, helps tremendously in both maintaining that good performance or driving improvement. However on the other hand, if you have all the systems in the world and all the safety managers in the world and still cause liability issues for your insurers you will not get any savings and are more likely to get increased premiums.
In my personal experience, I have worked with companies who have saved as much as 30% on insurance costs, admittedly these high reductions are usually where H&S needs to be organised and then understood and managed by line managers. Once that is done, it becomes much harder since you start to get into capital costs for other improvements that also need to be set against any reductions. (e.g. mech handling aids for MHO risks)
And, of course, there comes a time when you bottom out on available savings on insurance. What then as justification for your continued use to the business, but that is another thread?
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Posted By Phil Grace
Tricky..... I work for a major insurer but would never give the impression that having a full time "safety person" would reduce premiums. It wouldn't work for an office or retail risk! But as has been said a large manufacturing/engineering risk could warrant a dedicated person.
Other comments on costs are well made. The return for the company on saving uninsured costs is likely to far exceed any savings on premium.
Your Employers' Liability policy will pay compensation to injured person, your legal costs and those of claimant and legal costs of defending a prosecution. But it won't pay fines, will not cover costs of investigation etc. Nor will EL pay for costs associated with all those accidents that don't result in a claim... just try adding up the costs of those!
Phil
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Posted By AJM
Thanks so far for your info, very interesting
Alan
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Posted By David Bannister
I too do work for a major insurer and commend the previous comments.
When I carry out H&S surveys on their behalf I would make a judgement on what level of H&S resource, expertise and competency is currently available, consider whether this is adequate (number of criteria including hazards, numbers exposed, likely consequences, previous history of incidents) and suggest improvement if I deem it necessary. In rare instances this may be termed as a "must do" but more often as "we recommend..."
In the exceptional circumstance of an undertaking with high risks, little of no access to competent H&S advice and no interest in improving this, then my advice would be to the underwriter to reconsider the wisdom of doing business together!
Whilst I have no direct control of premiums, underwriters do consider the results of surveys and will take a considered view at next renewal. Even in the current "soft" UK liability insurance market, well-managed undertakings will benefit more from lower premiums than those with less developed systems.
Sorry no hard figures to provide but this may assist in formulating an argument for more resource.
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Posted By Stupendous Man
I think you will find it hard to find an insurance company that will give you a premium reduction simply by employing dedicated H&S staff.
The usual benefit is longer term - the theory is that dedicated H&S resources will lead to a fall in accidents that will result in less insurance claims and less money paid out by the insurer. This will then lead to a reduction, or lower increase(!) in insurance premiums.
Quantifying reductions in insurance premiums is always a tricky business - the underwriters will set the premium according to the expected losses, but will also adjust it to take account of the state of the market. Therefore, if there is plenty of competition in the market, and you have a poor accident record, you could still see a reduction in your premiums. Conversely, even if you reduce accidents and have fewer claims, if there is little competition in the market, the insurer does not have the motivation to cut premium rates.
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