Points to Consider Before Becoming Self-Insured

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If you represent an organisation, consider self-insurance as an option. Self-insurance can be a hugely beneficial setup for an organisation, but it does require a structured management system and a clear understanding of the knowledge base that is needed. Because there is strict legislature around self-insurance, organisations wishing to go down this path must be certain of the ways in which their business measures up, and what is required in terms of licensing requirements.

Is Self Insurance Right For Your Organisation?

Before deciding upon the option of self insurance, an organisation needs to consider key elements in assessing its suitability. This process is twofold–first, an organisation must consider whether or not self insurance is a cost-effective solution by comparing potential outlays with third party insurance and worker’s compensation procedures. Second, an organisation must assess its own compliance with eligibility requirements to evaluate whether or not it is a viable option. Information can be sourced from industry OHS risk management insurance practices.

Management

A lot of issues surrounding self insurance concern the element of management. There are very specific criteria that a business must meet to satisfy licensing requirements and as such there needs to be a detailed and consistent approach to management in order to comply. Included in this is the establishment and maintenance of statutorily compliant management programs across all relevant areas. For example, the organisation needs to prove that they are able to support the financial commitment of self insurance, as well as operate a compliant OHS system, among other things. A comprehensive and compliant worker’s compensation program also needs to be put in place and businesses must be fully capable of running and managing this.

Getting Support

Before and during the implementation of self-insurance, it’s important to seek guidance from experts in the industry. Because there are several rules and regulations with which to comply, as well as a complex set of ongoing parameters that must be met, enlisting the services of a qualified safety management consulting company is always advisable. A safety management consultant will not only be able to guide an organisation through the necessary steps, but will provide a source of valuable information in terms of industry standards, protocols and operational procedures.

Self-insurance is a viable option for many businesses providing they meet the requirements. It can be beneficial for any organisation wishing to bring OHS and worker’s compensation management in-house, often proving extremely cost effective. Before making the decision however, it is advisable to consider the management requirements, assess suitability and seek advice from a qualified safety management consultant in order to make an informed decision as an organisation.

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