Health insurance

Health insurance

Health insurance

The UK Health and Safety Executive (HSE) recently examined how changes in insurance arrangements might better promote health and safety in UK companies.

Welcoming the research, Dr Peter Graham, director of HSE's Strategy and Analytical Support Directorate, said "Insurance can be an important lever in motivating employers to practice good health and safety. The UK can learn much from systems operated in other countries and initial reaction to the research shows that there is a willingness from both employers and insurance firms to explore different options".

In the UK there are two main systems of financial compensation for workplace injuries and illness. These are:

1. 1.

   Employers' liability insurance – under which employees may receive damages for accidents or ill health, and

2. 2.

   Industrial Injuries Disablement Benefit that provides "no fault" state benefits.

It has long been argued that the Industrial Injuries Disablement Benefit scheme offers no incentive for companies to improve their safety record and that there is little evidence the employers' liability insurance does so either.

The research is a product of the "Revitalising Health and Safety" (RHS) strategy statement launched by the Government and the Health and Safety Commission (HSC) in the summer of 2000. Revitalising makes clear that insurance has a key role to play in helping us achieve our health and safety targets, "The compensation, benefits and insurance system must motivate employers to improve their health and safety performance, in particular by securing a better balance in the distribution of the costs of health and safety failures" (Action Point five of the RHS Strategy Statement).

To take this forward the Health and Safety Executive last year commissioned research to look at how possible changes to our insurance and compensation arrangements might best motivate changes in safety performance and encourage greater business focus.

The main aim of the research "Changing business behaviour – would bearing the true cost of poor health and safety performance make a difference?" was to identify insurance instruments which could have an impact on the costs of health and safety borne by employers; look at the business factors concerning insurance that may influence employer behaviour, including business perceptions; and examine the manner in which such instruments could be implemented.

The research surveyed comparable overseas systems, sought the views of UK insurers, business and other stakeholders and explored the feasibility of options of using insurance as a motivator for improving employers health and safety performance.

HSC/E is now promoting discussion of the research findings in association with the insurance industry, business, trade unions, Government and other stakeholders. The central question to that work is whether present insurance arrangements improve or impede health and safety. The role of HSC/E is to facilitate that wide-ranging debate.