Employers liability insurance may be compulsory but there are ways for businesses of all sizes to keep their premium costs down.

Employers that take an active role in workplace health and safety can also reduce their less insurable costs. Active risk management almost always creates positive results for the company’s bottom line.
In what can be very competitive environments, companies with falling injury rates and lower claims frequencies will be able to shop around for lower premiums.

At the same time, insurers are looking to hang on to any business with an improving record. They are able to offer details to customers that work to reduce the chance of work place injury or illness.

But this is just one of the ways effective risk management strategies can help reduce an employer’s costs. There are plenty of indirect costs that disappear with a happier, healthier and safer workforce, and most of them are otherwise uninsurable.

Take the costs of higher than usual staff turnover. This can occur when employees rank safety lower than business priorities. The expense of advertising for new workers, then selecting and training them, certainly highlights the value of a tailored risk management programme.

Other hidden costs of a poor safety programme can include high absenteeism, equipment damage and legal fees. Larger employers should also be aware of the effect workplace accidents may have on a company’s public image.

The media are always in tune with workplace safety issues and can quickly stir up public sentiment. Well publicised accidents have the potential to destroy brands and corporate reputations. We suggest that many employers operate at a sub-optimal level of occupational health and safety and more investment in this area would reap higher financial returns.

If businesses understood the real cost of injuries, they would make the right kind of investment decisions.