GOODRISKPROFILE WILLAIDINSURANCE COSTSANDCLAIMS
GOODRISKPROFILE WILLAIDINSURANCE COSTSANDCLAIMS
Having – and maintaining – a good record on health and
safety isnt just desirable for its own sake. It can also help
keep down your long-term insurance premiums
While it is obviously impossible to eliminate all insurance claims, a disciplined approach to health and safety matters on the farm or
related business can reduce the likelihood of having to make one.
REDUCING the number of deaths and injuries on UK farms each year brings obvious benefits – less pain, less disability, less bereavement and less disruption to the farm business. But there is also a further benefit, says Harrogate-based insurance underwriter AIUA.
Many accidents can result in an insurance claim. Defective wiring, for instance, is the most common cause of fire, and inadequate machinery guarding can lead to an employer liability claim. Underwriters appraise each farm on its merits and are usually keen to accept risks that demonstrate low claims experience.
Although some claims are more associated with security than health and safety, the larger losses usually relate to health and safety issues. The payout after a theft claim tends to be less than £10,000, while serious fires or employer liability claims can run into millions. Consequently, underwriters pay particular attention to these aspects of any risk.
The message is clear. The first step towards a long-term reduction in insurance premiums is to avoid major incidents and this can be achieved by a disciplined approach to health and safety. Naturally, it is impossible to eliminate all insurance claims, but farmers are capable of reducing their likelihood.
This message is echoed by Northants-based Farmweb insurance broker Farmers and Mercantile, which also points out that there has been a big increase in the number of claims made against farmers by members of the public and farm employees. This move toward an ever more litigious society has the potential knock-on effect of increasing the cost of farmers insurance premiums and is another reason for maintaining a spotless safety record.
But premiums are not the only cost. There are the related business and human costs for the victim and his or her family. And what would happen to the business if the farmer were incapacitated?
Accident consequences
Other consequences of an accident may be that seasonal operations are not completed on time, or that machinery, produce or livestock are damaged and need to be replaced. Or there may be fines, bad publicity, loss of customers, the cost of investigating the incident and the need to hire and train temporary staff.
What can you do? To help maintain, or even reduce, premium levels for your farm business in both the medium and long term, the most important thing is to maintain a good risk profile, says Farmers and Mercantile. If you can achieve this, the knock-on effect will be to help your longer-term claims record. Farmers with a poor claims record are finding it difficult to buy insurance cover at reasonable rates. Worse still, some are finding it impossible to attract alternative quotes at all. *