Health & Safety: Comply & Insure

Today, the responsibilities of executives are plentiful since the business world is constantly evolving. Regulatory requirements and emergence of new risks force employers to be compliant with laws, otherwise legal repercussions can be important.

If we look at the risks related to security and health at work, several laws and obligations do exist and create liabilities on employers, although often employers do not have a comprehensive understanding of them. Insurances can compensate some financial consequences, but human and legal consequences are irremediable, making risk management a must.

We may imagine several kind of incidents as for instance a serious injury involving an employee on the workplace or at a client’s premises.  We may also consider unwellness at work or pollution issues.

Which insurances to consider?

When such events take place in Luxembourg, several insurance policies are supposed to intervene:

General Liability Insurance (GL) covers damages incurred by a third party and caused by the staff or the company’s assets. A damage suffered by a visitor will therefore be covered by this policy. In case of an accident of an employee, social security will intervene, but it is possible that it will turn back against the company in case of safety-related defects, and therefore against its GL insurer. Accidental pollution at a third party location could be covered as well.

Directors’ and Officers’ Liability Insurance (D&O) could also be looked for. It is up to them to implement in the society a safe and sound working environment. Nowadays, it is not acceptable to be neglectful with staff security. If such a fact can be invoked, directors may be liable and the D&O will protect their personal assets.

In the same vein, atmosphere at work is crucial; the company must avoid harassment, discrimination, wrongful dismissal … Employment’s Practices Liability Insurance (EPL) covers the defense costs and other financial consequences related to alleged breach from the employment process.

Direct consequences of accidental pollution to third parties will normally be covered by the General Liability Insurance, but more complex damages (biodiversity…), those coming from gradual pollution or on-site damages, will not be covered under the GL insurance, they need specific pollution policies. In addition, they will cover pollution damages following a fire, which are  excluded from property policies (such as groundwater pollution by fire water run-off).

The employer can therefore reduce the financial risks with a well-structured insurance program, but regulations should be complied with and risks have to be managed. In this regard, you can use external prevention providers offering Health & Safety audit, risk assessments to determine precisely what are the risks related to health at work, support to implement tools for preventing risks and documenting the process for compliance reason. Those preventive measures should have a positive impact on your loss history, reduce the number of accident and make your insurance program sustainable.

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