Insurance Companies Can Influence Company Health and Safety
Traditionally all responsibility for health and safety in the workplace has been the sole responsibility of management. Even though in modern times they will be forced to introduce and comply with a great deal of legislation, it is still up to managers to actually put it into place and ensure that it is complied with. Nowadays, insurance companies are increasingly becoming active at influencing the health and safety policies of the company to which they provide insurance.
Similar to individuals and private households, businesses rely upon insurance to cover them in the event of an incident which would otherwise cause significant financial loss to them if they had to repair or replace items. This could come from a whole host of risks such as fire damage, flooding, explosions etc. Businesses have an additional level of insurance in the form of liability insurance which covers them in the event of them being sued as a result of an action or inaction on their part which caused damage to a person's health or property.
The amounts of money involved for corporate insurance claims are often far higher than they are for private individuals. Insurance companies will feel a greater financial impact when they have to pay out for a large corporate claim. As such, they will want to have more of an idea about what goes on within the company and, more pertinently, what measures and controls are in place to minimise the chances of an incident taking place which would result in an insurance claim.
The extent to which insurance companies are concerned with potential payouts has resulted in an increase in the level of scrutiny and influence which they have over the company to which they are insuring. If they are going to cover them for such large amounts, they want to know what the company is doing to reduce the chances of such an incident occurring. They may even demand certain conditions be met and particular control measures be put in place as a prerequisite of them providing the requested level of insurance cover to the organisation.
It is also likely that the insurance company will require a certain level of understanding about what the company does, how it goes about it, the risks involved and what it does to minimise such risks when it decides upon the level of premium to charge for providing the insurance. Because circumstances change, the insurance company will often want to conduct periodic reviews to ensure that risks are still being managed appropriately to determine that the premium being charged is high enough. It may also be the case that the company can introduce such comprehensive controls, safety features and level of health and safety training that it actually warrants a lower insurance premium than currently being charged.