Self insurance can be ideal for many organisations, but it’s also a demanding task for business management. The knowledge base required is sometimes extensive, and a bit of professional advice and support is often useful to both clarify issues and make sure everything’s being done properly and in compliance with licensing requirements.
Self insurance management issues
Self insurance licensing is regulated in each state or territory. Licenses are issued on the basis of meeting strict but very business-friendly regulatory criteria. Because self insurance involves businesses taking on the financial and management responsibilities for workers compensation, it’s necessary that a full spectrum of management programs in these fields are implemented. These management programs are required to be statutorily compliant.
There are several fundamental operational areas to be addressed:
Risk management practices
OHS programs and operations
Financial management requirements
Workers compensation management
Functionally, this means that businesses must:
Prove the ability to provide financial support to the self insurance program
Put in place the required management programs
Operate a fully compliant OHS management system
Operate a workers compensation program in accordance with the requirements of the regulators legislation.
Assessing your needs
Cost effectiveness of self insurance is a major element of assessment. Self insurance is a particularly efficient form of workers compensation coverage for many employers. It’s an opportunity for businesses to take control of an important area of risk management. If you consider this an appropriate response to your insurance issues, the next step is to evaluate the self insurance management requirements involved.
All businesses are different, and all require appropriate management systems to qualify for self insurance licensing. The OHS and risk management insurance practices for your industry give a good rule of thumb guideline for assessing your requirements for self insurance, and the management systems involved.
Getting support and backup when you need it
The setup of a compliant self insurance system requires implementation of a range of management practices in compliance with law. It’s normal practice for businesses to seek the assistance of expert risk management consultants who specialise in this field to ensure approval of the self insurance license application.
The best health and safety management consultants can also provide management services for self insurance, including the very important safety audits, as well as compliance management and advisory services. These services are particularly valuable in terms of dealing with complex workers compensation licencing processes.
The other area of support commonly required is in terms of best practice risk management. OHS management systems are continually evolving and providing solutions to difficult workplace safety issues in all industries. Best practice risk management support provides a combination of real time expertise with operational issues and strategic management expertise.
Self insurance is a real option for employers who are working with a large workforce and want a clear cut, in-house management regime for OHS, industrial safety and workers compensation. Whatever the specific needs of a business, experience has shown that the combination of self management and good risk management is the right solution for employers.