There is no denying it, the current insurance market in Ireland is a challenging one, as it is for the insurance industry itself. Business is experiencing what is termed a ‘hard insurance market’, which means higher renewal rates, less competition, a growing claims culture and generally poor risk-management practices. There’s not much that we can take control of in this scenario, and this can be explained by the following 5 evidence-based facts that you need to know while currently operating a commercial business in Ireland.
- Ireland is one of the most litigious countries in the EU, with frequency of claims & cost of claims rising year-on-year
- Large variation in court judgements result in new precedents and an ever-increasing ‘payment ceiling’ effect
- Because of an existing loophole that is not being addressed, claimants can avoid the Injuries Board and claim through private solicitors, thereby dramatically increasing costs for insurers and directly impacting insurance premiums
- Preventive safety measures are not sufficiently implemented within business operations to support the prevention and defence of incidents, accidents and consequential claims
- On average, there is a general lack of ownership and accountability from the employer, customer and employee for their own personal safety and risk awareness,
According to industry experts the ‘hard-insurance market’ is set to continue for the foreseeable future and the growing claims culture in our country in also set to continue. We are at the stage now where a higher number of people are likely to ‘play the system’ and try to claim where usually they would not behave in such a manner. The reality is that operating a commercial business in Ireland automatically means that you are not playing on a fair playing field. However, evidence shows that all is not lost in fighting back against the current reality. Research shows that no matter what your business is, if you take the time and energy to foster a proactive safety culture, you can mitigate a large percentage of the factors that lead to unsafe behaviours and conditions that lead to incidents, accidents and consequential claims.
THE OPERATIONAL REALITY
To begin to address the challenge outlined above, it is important that businesses admit two important things: 1) Operating a business comes with hazards depending on a number of variables; 2) Many businesses are unaware of their legal responsibilities, risk variables and HOW to establish a Proactive Safety Culture when it comes to managing risk in their business. It is a fact that the operational space is highly dynamic with multiple hazards leading to risk in a number of different areas on a daily basis. For example, a recent piece of research examining the factors that lead to claims in the Retail Sector across a significant sample demonstrates that Slip, Trip & Fall is responsible for 50.6% of all claims within the sector (both public & employee liability). Reference the figure below to see in more depth the risk factors that lead to incidents and consequential claims in the Retail Sector. Similar figures are apparent in the property management, hospitality and manufacturing sectors (with the latter more affected by EL issues including manual handling, RSI and behavioural inconsistencies).
*NOTE: these averaged figures are a representative sample of quantifiable data made available over 5 years and reflect the wider retail market
WHAT IS SAFETY CULTURE
The technical definition of Safety Culture is “The product of individual and group values, attitudes, perceptions, competencies and patterns of behaviour that determine the commitment to, and the style and proficiency of an organization’s health & safety management.”(ACSNI: HSC, 1993). However the simple and most effective definition is that Safety Culture ‘defines what people do when nobody is watching’. This definition refers to a culture where all people are connected to the safety message and have a sense of ownership and accountability for both their own safety, and those of their colleagues and customers. This sense of ownership is absolutely critical to both leading and sustaining a proactive safety culture. Many organisations spend time, money and assign resources to managing the environmental, structural and compliance-based risks. These tend to be static and are relatively easy to control. However, the human factor when added to these environments often introduce ‘uncontrollables’ that can cause problems. In a nutshell, if an organisation allows itself to foster negative attitudes towards risk management and safety practices, any sense of ownership will get eroded over time and risk will increase. Another symptom of poor safety culture is an increased propensity to claim following an injury, no matter how it happened or where the fault may actually lie.
Organisations with a Poor Safety Culture generally demonstrate:
- Poor compliance
- Poor risk management systems
- Poor leadership of Safety Best Practice
- Disengaged staff
- Poor operational feedback and communication of the safety message
- Poor attitudes that lead to unsafe behaviours in the workplace (e.g. ‘it’s not my job to stay safe’; ‘I’ve never been hurt before so nothing will happen to me’; ‘all of this safety stuff is over the top’)
- Mistrust of Management
- Increased claims culture
Organisations with a Proactive Safety Culture generally demonstrate:
- Adherence to relevant compliance
- People-based risk management systems (e.g. practical, visual and engaging systems)
- Effective leadership of Safety Best Practice (at front-line manager level)
- Engaged and motivated staff
- Positive attitudes that lead to safe behaviours in the workplace (e.g. ‘safety is an important part of every function’; ‘I will be accountable for both my own, my colleague’s and my customer’s safety’)
- Trusting Management because they give feedback and connect people through practical systems
- Reduced or non-existent claims culture
So how does an organization go about building a Proactive Safety Culture which would positively impact on both staff morale and the bottom line? Read below for more…
It is critical that organisations give adequate attention to all potential structural and behavioural hazards and risks, and do their utmost to avoid them in a proactive way. 80-95% of all workplace accidents are behaviour-based, and as such proactive safety measures and staff training go a long way to avoid silly errors and mistakes that lead to accidents, incidents and consequential claims.
By addressing some of the 10 key tips below you will begin to foster a proactive safety culture, and reduce the risk of accidents/incidents and subsequent liability claims occurring in your business:
- Make sure you are legally compliant with relevant H&S legislation to your business operations
- Make sure that you effectively communicate risk to your Staff (Safety Statement is not enough)
- Provide practical (not just online) H&S training for your Staff (e.g. especially manual handling)
- Investigate accidents the right way (e.g. gather facts not opinions)
- Learn from Near Misses by tracking them and logging corrective actions (to avoid a repeating hazard)
- Have an external H&S audit at least annually (outside eyes are key to continuous improvement)
- Provide a system that ensures ownership at local levels across your organisation (don’t just police safety through a few designated people)
- Tackle the priority issues in your sector with proactive solutions, e.g. Slip, Trip & Fall; Fire Safety, Contractor Control
- Remember, 80-95% of all workplace accidents are behaviour-based, so address unsafe attitudes and behaviours before an incident occurs
- Work WITH your insurance partners to demonstrate your proactive risk management and to leverage cost management into the future
Case-study evidence shows that if the points above are implemented and risk management becomes an integral part of an organisation, where good habits are formed from the leader all the way to the new hire, then risk factors and consequential claims will be significantly reduced. See below a graphical representation of this evidence, where graph A shows a 33% Reduction in Claims Frequency after a Safety Culture Initiative was undertaken across 4 large client groups totalling over 30-unit organisations. Graph B shows a 50% Reduction in Claims Cost after a Safety Culture Initiative was undertaken across 4 large client groups totalling over 30-unit organisations.
So it is clear to see that there exists a direct and positive correlation between Safety Culture and Claims management. In closing, ask yourself what needs to be done to ensure that all of your workforce consistently behave in a safe manner where accountability for safe behaviour includes their own, their colleagues and their customers… even if nobody is watching! Then you will sleep better at night, because you will have a sustainable safety culture that will ensure all boats rise across your organisation.
Contact SeaChange for support in increasing safety culture and reducing the likelihood of claims within your business.