Self insurance is becoming an increasingly popular option for employers, and one that has substantial financial and practical benefits for certain workplace situations. Self insurance is an alternative to utilising a third-party worker's compensation insurance company, and is a licensing agreement undertaken by businesses and underpinned by legislation which allows employers to take control of their own health and safety administration. The business is responsible for carrying the risk of potential payouts and calculating claims and compensation for their employees.
How Does it Work?
In order to be a self-insurer, a business has to satisfy three main criteria. These criteria are as follows:
A developed and implemented OH&S management system--This means that in order to pass regulation businesses that wish to be self-insurers must have a satisfactory OH&S program and a management model in place that allows them to assess and improve on the system.
Size and Financial Viability-- This means that a business has to be able to prove that it is both large enough and financially viable enough for self-insurance to be a feasible option. The optimal number of employees is around 750, and an employer has to satisfy audits to ensure they can meet responsibilities regarding compensation and health care.
Developed Injury Management and Return-to-Work Programs--This means that a workplace or employer has to have developed programs that facilitate the care and rehabilitation of employees who may have suffered an injury at work and need to make a claim for either compensation, loss of pay or medical treatment.
Benefits of Self-Insurance
There are several reasons why a business that meets the self-insurance requirements would choose this option as opposed to enlisting third-party insurer. For starters it is a practical and logical method of dealing with administration and claims in-house, rather than having to outsource and face lengthy delays and confusion. In addition to this the cost is carried and managed by the business itself, which means admin costs are drastically reduced and any 'premiums' stay within the company.
Self Insurance Management
While it can seem difficult and a mammoth task to manage self insurance administration, the bulk of the hard work happens in the implementation of programs and the satisfying of criteria. Once the initial start-up has been figured out it is mainly a matter of common sense and risk-management. A lot of businesses enlist the services of a safety management consultant in order to ensure they meet requirements and regulations. This is the most crucial part of self insurance and can cost greatly in terms of both time and money if it is found that your business fails to meet the grade. A safety consultant can simplify processes and clear up issues that can be confusing to the untrained eye.
How Does it Work?
In order to be a self-insurer, a business has to satisfy three main criteria. These criteria are as follows:
A developed and implemented OH&S management system--This means that in order to pass regulation businesses that wish to be self-insurers must have a satisfactory OH&S program and a management model in place that allows them to assess and improve on the system.
Size and Financial Viability-- This means that a business has to be able to prove that it is both large enough and financially viable enough for self-insurance to be a feasible option. The optimal number of employees is around 750, and an employer has to satisfy audits to ensure they can meet responsibilities regarding compensation and health care.
Developed Injury Management and Return-to-Work Programs--This means that a workplace or employer has to have developed programs that facilitate the care and rehabilitation of employees who may have suffered an injury at work and need to make a claim for either compensation, loss of pay or medical treatment.
Benefits of Self-Insurance
There are several reasons why a business that meets the self-insurance requirements would choose this option as opposed to enlisting third-party insurer. For starters it is a practical and logical method of dealing with administration and claims in-house, rather than having to outsource and face lengthy delays and confusion. In addition to this the cost is carried and managed by the business itself, which means admin costs are drastically reduced and any 'premiums' stay within the company.
Self Insurance Management
While it can seem difficult and a mammoth task to manage self insurance administration, the bulk of the hard work happens in the implementation of programs and the satisfying of criteria. Once the initial start-up has been figured out it is mainly a matter of common sense and risk-management. A lot of businesses enlist the services of a safety management consultant in order to ensure they meet requirements and regulations. This is the most crucial part of self insurance and can cost greatly in terms of both time and money if it is found that your business fails to meet the grade. A safety consultant can simplify processes and clear up issues that can be confusing to the untrained eye.
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