Liability premiums have increased dramatically over the past five years and, in particular, employers’ liability rates have had to bear the cost of changing legislation, new types of claims and the trend towards a compensation culture.
In 2003 the employers’ liability crisis was widely reported and many called for immediate legislative changes. While the headlines have subsided, the pressure on premiums remains.
December 2003 saw the Civil Justice rules extended to include disease and illness claims as well as personal injury claims and 2004 saw the introduction of NHS recovery on all employers’ liability claims and the extension of the requirement for insurers to make periodic payments.
The table shows the top five causes of liability claims-related incidents. By being aware of this information, businesses can manage their liability risks and associated costs.
The most common causes of machinery, tool and material incidents are inadequate guarding and control mechanisms; bypassed safety devices; lack of maintenance/inspection; untrained operators; improvisation and using equipment for unintended purposes; and restricted space.
The risk of these incidents can be reduced by guarding the machines properly; having the appropriate controls fitted (such as emergency stops); maintaining the machinery including any thorough examination; ensuring machinery is routinely inspected; establishing an adequate defect reporting system; ensuring all plant is installed correctly; adequate training; isolating machinery from all power sources; having safety systems of work for maintenance and setting operations; and posting appropriate warning signs.
Facing the consequences
Failing to take these steps can have an enormous impact on your business. In one case, a trained operator removed a fixed guard on a machine in order to clear a product jam. The machine automatically started once the blockage was cleared, trapping the operator’s hand. He had two fingers amputated. The outcome was a prosecution and a fine, an instruction to upgrade the guarding on all 17 similar machines in the factory, introduction of a formal system of work for clearing blockages and additional training to operators.
The machine involved was quarantined during the investigation and there was considerable disruption to production while upgrading was done. The injured man did not return to his normal duties and morale took a dive. Customers began to take a closer interest in the health and safety standards of the company and started to impose additional conditions in their contracts.
The estimated annual cost to the company over and above the insurance claim was £71,000.
The most frequent causes of tripping or slipping are an untidy work place; poor maintenance of machines (eg oil leaks); no cleaning programme; inadequate footware; wet floors; and poor lighting.
To reduce the risk ensure floors are in good condition; provide adequate lighting; identify designated walkways; ensure good housekeeping standards; provide suitable footware; treat floors (eg non-slip in wet areas); document a cleaning programme for spillages; establish effective maintenance programmes for machinery to eliminate oil leaks; and establish an adverse weather programme (eg snow clearing, gritting walkways).
Some 95% of major slips and trips result in broken bones. In a case of a man slipping on ice outside his workplace, he broke his leg and was off work for 10 weeks. He was a skilled worker and temporary staff had to be brought in and trained. The estimated cost to the company, additional to the insurance claim, was £17,000.
People can be hit by objects from moving vehicles, including fork lifts; materials falling from racking and scaffolding; work pieces ejected from machinery; and falling tools (eg people working from ladders).
However, the risk can be reduced through identifying and assessing potential causes; introducing appropriate control measures; introducing traffic control measures; good housekeeping; and machinery guarding to prevent ejected materials striking people.
Loss of business
An employee helping a delivery driver to reverse his vehicle died when he was crushed against the rear wall of the warehouse. The company – and a director – were prosecuted. This was the second incident and the company began to find it difficult to recruit staff.
Although the accident was not specifically mentioned as a reason, customers did not renew their contracts and the company has since ceased trading.
Problems from lifting can arise from handling sharp or hot/cold objects; excessive pushing, pulling or supporting a load; trying to lift a heavy weight; poor lifting technique; poor working environment (eg cramped); poor housekeeping; restricted vision; and gradients.
But the risk of injury can be reduced if you assess exposures taking into account the task; the load involved; the working environment and the individual’s capabilities; eliminate the need to lift; introduce mechanical aids; provide personal protective equipment and good lighting; avoid long carrying distances; and provide training.
At one factory employees had to lift finished items off a conveyor belt and stack them in boxes. The process meant leaning over repeatedly in order to fit the items into the boxes that were at floor level. Absenteeism was high and time lost through back injury doubled to a level whereby at least two members of staff were absent each day and temporary (less efficient) staff were employed.
Additional costs arose for additional labour and liability payments, as well as production inefficiencies. The costs were repeatedly incurred until mechanical aids were introduced into the packing line.
Falls from heights can be caused by a failure to establish a safe working system; inadequate training and supervision; inappropriate equipment; and failure to provide safe plant and equipment.
But the risk can be reduced by proper planning; consideration of the potential risks; not underestimating the risk; considering safer ways of doing the work; deciding what equipment is required; installing preventative systems (eg guard rail); ensuring equipment is fit for purpose; ensuring there are no defects; and ensuring the equipment is used safely.
The supervisor of a team of shopfitters was concerned that the target date for completion of a project would be missed. On site to assess progress, he fell 2m from an unfooted ladder after overreaching. He broke an ankle and wrist in four places. The project was not completed on time, the company had to pay a penalty clause and was prosecuted by the HSE. Insurance premiums rose significantly because of the incident which drew attention to the lack of maintenance safety controls.
