Why companies are spending big bucks on insurance
Tue 12 September 2017 - 8:00 amExpert | Insurance | Opinion
Even from your first day in business, you will be exposed to certain risks. From the moment you hire your first employee, have a hundred under your watch or packing up shop and exiting, insurance has to be top of mind. It is all about ensuring you and your employees are covered no matter what occurs, when, how and to whom. But, that often means digging deep and spending large on the appropriate insurance policy. Here are some guiding principles for addressing workplace health and safety.
Insuring your insurance
For any type of business, avoiding major financial loss is the ultimate motivator. A major mistake many small businesses make is believing less employees under their watch means less insurance and resources needed to be dedicated to their safety. But it usually tends to be the other way round.
There are certain insurances that are compulsory to a small businesses such as worker’s compensation insurance, which protects multiple levels of care for all employees. Whether you are a new business, entrepreneur, or small to medium enterprise, it all boils down to public liability insurance (PLI).
PLI becomes a business owner’s saving grace because it protects you in certain circumstances where an individual is injured and finds the employer at fault for personal injury, property damage, or worse. Even one employee tripping could cripple your entire business.
Many businesses will end up paying excessive amounts of dollars when an employee, client or contractor suffers an injury under their watch, on their premises or out on a job without PLI protection. This also accounts for those who have home offices.
With any type of insurance, the level of coverage versus the standard of risks employees are exposed to daily and routinely need to be weighed up. If you are in the construction industry, employees and contractors are exposed to greater risks comparatively to those occupying office hours. If you have less employees, they tend to have larger responsibility and are more at risk of potential injury. You’ve got to weigh it up.
What many businesses have been doing is taking out larger insurance policies to ensure they are never personally exposed to circumstances their insurance policies will not be able to claim. For example, if an incident incurs an $8 million claim but a company’s insurance only covers $5 million dollars, there is a real chance that company might end up being liable for another $3 million if it isn’t taken care of properly.
All industries have different workplace health and safety measures, but at the end of the day you never know when an accident could happen and if you are not appropriately covered, the financial burden will be large if you are found liable.
A solid WH&S
Unexpected injuries come hand in hand in the workplace and there only needs to be one unfortunate instance for a lawsuit to force a business to close. No matter what type, structure, size or industry a business belongs to, the only way to actually “insure” yourself is by not skimping on workplace health and safety (WH&S). You can burn a hole in your pocket or choose an off-the-shelf policy, but at the end of the day, if your WH&S is not up to par, any type of injury will likely increase your premiums and cost you more in mediation. A business will never come in to contact with Kemp
Law if they implement a safe system of work. When an injury claim between an employer and the injured party comes to us, a successful result does not always mean both parties win.
There are always hidden dangers that could affect its employees and could potentially make it liable for their work-related incident or illness. It’s tempting to think that because you spend big on insurance you can be slack on the WH&S but they go hand in hand. You can’t have one without the other. As an entrepreneur or small enterprise, it is important to ensure resources are dispersed appropriately for these reasons. Whether you have one or one hundred employees, keeping a comprehensive WH&S in place keeps safety on track as the employer will always bear the responsibility if they are found negligent. So do your research and anticipate any possible injury that could affect whoever comes into contact with your business – no matter how big you spend on insurance or not.
About the author
Michael Kemp is the managing director of Kemp Law, which offers specialist legal advice on personal injuries, work related injuries and motor vehicle accidents.