17 INSURANCE
287. The question as to whether insurance
can play a greater role in improving health and safety standards
arose in the course of evidence to the Committee. The Association
of Personal Injury Lawyers (APIL) talked about the case for making
the compensation system an express part of health and safety and
referred to fear of compensation claims as a lever in encouraging
schools to adopt anti-bullying policies.[483]
Concerns were expressed to the Committee that a 'compensation
culture' was developing in the UK. [484]
The Committee notes, however, that a recent report of the Government's
Better Regulation Task Force, found this not to be the case.[485]
This was confirmed in evidence to the Committee by the then Minister
for Work, Des Browne.[486]
Figures from the Compensation Recovery Unit (which records personal
injury claims made to general insurers and then related to employers'
liability claims specifically) show that between 2000/01 and 2002/03,
the number of claims in this area actually fell by 16% from just
over 219,000 to just over 183,000.
288. Revitalising stated that 'major
reform of the compensation, benefits and insurance system presents
the prospect of a powerful new lever to raise health and safety
standards.' [487]One
way of using insurance as a lever to encourage good practice on
health and safety is to link a company's insurance premiums to
its risk levels. The Association of British Insurers told us that
insurance companies were able to do this with larger companies
who have a 'claims experience' on which to base this.[488]
Furthermore, it was viable for the insurance company to visit
the firm, get to know the management and make recommendations
for risk improvement. With smaller business, this is often not
viable or cost effective, particularly when the insurance company
has hundreds of thousands of customers. ABI explains that in the
case of smaller companies, therefore, the approach is to base
the premium on the claims experience of groups of firms, usually
by sector or trade.
289. The Department for Work and Pensions,
in its review of Employer's Liability insurance, has emphasised
that more effort should be made to link premiums to health and
safety[489]. Individual
insurance companies have developed questionnaires to help them
better understand efforts being made by SMEs to manage risks.
The ABI and member companies are successfully operating the Making
the Market Work initiative, which assesses the health and
safety performance of trade associations.
483 Volume II (Ev 63, Q224) Back
484
Volume II (Ev 55, Q176) Back
485
Better Regulation Task Force (2004), Better routes to redress.
London: The Cabinet Office Back
486
Evidence to the Committee 15 October 2003, Q7 Back
487
HSC (2000), Revitalising Health and Safety Strategy Statement.
June 2000, Wetherby,para 116 Back
488
Volume III (No. 59) Back
489
Department for Work and Pensions (2003), Review of Employers'
Liability Compulsory Insurance, First Stage Report. Department
for Work and Pensions. www.dwp.gov.uk Back
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