The Broker Business Club: The cost of health and safety

The panel discussed what the likely impact would be of the introduction of cost recovery charges for businesses found to have broken health and safety laws and if clients were engaging with the government’s red tape challenge.

The Zurich Broker Business Club discussion, held under Chatham House rules, also analysed how insurers could support brokers with knowledge and value-adding services and looked at whether risk assessments would be rising up the agenda, leaving those brokers who acted as advisers better placed than those who adopted the salesperson approach and focused exclusively on price.

Are clients aware of the change to charging around health and safety?

The general consensus was that clients were beginning to raise the topic more frequently but that they still had suspicions that the move to charge a fee for intervention was designed as a revenue raiser by the government.

“No matter what anyone says, these things in the current climate do seem to be driven by austerity measures,” said one broker. Another assumed the role of devil’s advocate and pointed out that it was only an additional cost if laws were broken. “I thought the principle behind it was that the people breaking the law should be paying the costs,” he commented.

However, another delegate countered: “Are they [inspectors] going to feel more motivated to find a breach? Are they going to look for something that is not there?”

One participant highlighted that, in the main, the changes had come in “below the radar” but that large companies who had traditionally worked in partnership with the Health and Safety Executive (HSE) were most concerned. All agreed that a serious danger would be clients concealing information in the hope that it would not be discovered.

However, an insurer representative was upbeat that the topic was gaining recognition among the buying public: “Major customers really want to understand it and budget for it. It is something that I see coming more into conversations than it ever was before.”

Are the HSE changes an opportunity for brokers to reinforce their advisory status?

All parties at the event agreed that the best practitioners were already on the case. “The only thing we can do is advise about it,” said one broker. “Through newsletters [and so forth] we certainly encourage clients to go down the right path.”

A Zurich representative encouraged brokers to continue to “raise the awareness” but accepted there were challenges for the whole industry due to the “broad area” HSE covered. “With large customers we get the opportunity to talk more and the subject is up for debate,” he noted. “At the smaller end it is a lot more difficult, it is access to advice and how do you really get people to understand it?”

The discussion turned to the topic of altruism, with insurers investing for industry profit rather than direct gain, and all agreed that there were benefits from all voices getting involved. “If people start hiding problems because they are worried about the cost, it ultimately leads to more incidents, that leads to more claims and that is going to have an overall impact,” reported one broker.

Another attendee suggested that trade associations were a potentially strong route for delivering the message. “A broker in charge of a trade association programme… then that is a great way of dispersing the information through that association’s website or newsletters or whatever it may be.”

Although another countered that some trade associations were more interested than others. “As soon as it comes in and their members start putting their hands up and saying ‘I’ve just had the HSE in and it has cost me £5,000’, then they’ll all be clamouring [to be involved] but the trouble is that’s after the event,” he surmised.