Last week, we talked about the general scope of Employers' Liability insurance, rising premium rates, low levels of provisions and capacity problems, and underlined that it should not be neglected.
Let's continue with Employers' Liability insurance this week.
The most important step to be able to benefit from the policy in incidents subject to the Employer's Insurance policy is timely notification. I would like to share another example of the importance of reporting.
In this case, the injured employee is a cook in a 5-star hotel. A very important role, as the tourism sector will attest. The cook, who is not a Turkish citizen, grows some plants in the garden allocated by the hotel. While preparing the kitchen, he went to the garden to pick some vegetables, tripped, fell and injured his hand with a harvesting knife, requiring a microsurgical operation. After treatment, he works at the hotel for a while and then returns to his home country. Upon his return to his home country, the cook filed a lawsuit against the hotel for compensation for the material and moral damages caused by his permanent disability and inability to work for a while. After the expert assessments, the hotel was found to be at fault, and the calculated compensation, including legal interest, exceeded 200,000€.
When this incident was reported to the broker by the insured, it turned out that it happened 10 years ago. Upon checking the statute of limitations, we realized that the policy expired 2 months earlier in the 10th year and the insured would not benefit from the policy. It was a significant amount. We asked to investigate whether there were any retrospective notifications. In the meantime, the insurance company was also informed and a claim file number was taken as a precautionary measure. As expected, the insurance company also shared the rejection information because the deadline had already passed. During this 10-year period, the personnel who followed up the insurances at the hotel had changed, the ownership structure and the name of the insurance company also changed. When the insured took out the policy, he was working with another intermediary. Finding retrospective information was difficult for both parties.
It took some time for the insured to search their own archives, but it was worth it. Within a month of the claim, the then insurance officer had emailed plenty of information to the insurance company, including the microsurgical operation, the cost of which was covered by the hotel, and obtained a claim file number.
The insurance company claims department was still appealing, but the fact that the notification had been made changed the process. The accident was reported on time. In litigation proceedings, the insurer had the right not to pay legal interest. At the end of the day, the settlement resulted in a substantial sum of 200,000 euros being paid out of the policy, which the insured had to pay unexpectedly due to an incident that took place 10 years ago.
Occupational Accidents
Occupational accidents remain a serious problem. Some statistics I obtained from the internet show the gravity of the situation.
Statistics on work-related accidents between 2012-2020 in Türkiye (Source: Ministry of Labor and Social Security)
According to 2021 records (Social Security Institution), 511,084 work accidents occurred, 94,006 of which involved women workers. In addition, according to statistics, 1207 people suffered from occupational diseases. In 2021, 1382 workers lost their lives as a result of occupational accidents.
According to ISIG reports, the statistics of occupational accidents in 2022 (Jan-Oct) by month are as follows:
According to ISIG statistics, the number of people who lost their lives in occupational accidents in 2022 is 1843. (It seems that current statistics have not yet been uploaded on the ISIG Directorate page of the SSI)
Research on the main causes of occupational accidents indicates that 79% of accidents are caused by unsafe behaviors and 20% by unsafe situations. Inadequate precautions, negligence and lack of training are the main causes of accidents. The sectors with the highest number of accidents are construction, land pipeline laying works and mining.
Apart from risky business lines, it is stated that the majority of accidents in 2021 occurred in workplaces, offices and workshops where people work continuously.
Laws and Regulations (OHS)
No. 6331, dated 20/6/2012 Occupational Safety Law Objective: to regulate the duties, powers, responsibilities, rights and obligations of employers and employees in order to ensure occupational health and safety in workplaces and to improve existing health and safety conditions". On December 29, 2021, the regulation published in the Official Gazette regulated the duties, powers, responsibilities and trainings of occupational safety experts. Although the principles and responsibilities have been determined by law, it is seen that the above-mentioned unsafe behavior and lack of training cannot be eliminated. The tragic loss of life and labor force in occupational accidents continues to increase. When compared to the EU and other countries, we regret to see that we are in the top ranks in terms of occupational accident rates.
Insurance Sector
Of course, insurance companies are also on the radar of insurance companies with such frequent death and permanent disability statistics (4 fatalities per day on average). Another issue that draws attention is occupational diseases. Although Employers' Liability is a coverage that can be added, it is possible to say that insurers prefer to stay away from it. We do not know how many of the accidents return to the insurance sector as damage claims. As the low insurance coverage rate caused by the lack of awareness of Employers' Liability insurance increases with the increase in awareness, these statistics and alarming numbers will make it very difficult to get insurance and find coverage.
2022 showed a very poor performance in terms of liability lines of business. You can access the technical damages in liability in the technical statements for the 2nd period of 2022 and the loss ratios at the end of the 3rd period of 2022 from the link attached. https://www.tsb.org.tr/tr/istatistikler
Although occupational accidents seem to occur mostly in industrial plants, construction/mining sites or open areas, accidents in offices and during business trips should not be overlooked. The debate on whether accidents at home during hybrid work, which has increased with the pandemic, are work accidents or not continues, and the decisions of the judiciary are carefully monitored. A precedent-setting decision will bring radical changes in insurance companies' risk acceptance and offers.
Risk Management
In Employers' Liability insurance, proper risk management, increased investments in the prevention of occupational accidents, effective auditing and review of claim reporting processes are the first conditions in order to receive an offer. Accurate and real claim history reporting for insurers, a good understanding of issues such as IBNR by insureds, and the timely involvement of the insurer in the process by reporting events that may be subject to insurance without delay have become very important for a sustainable employers' liability insurance. For this purpose, it would be beneficial for an independent 3rd EYE (*) to reorganize the Risk Audit and Insurance Processes through a project involving the OHS and Legal departments of our organization.
The facts shown by the statistics and the general picture in the liability lines of the sector suggest that insured persons should change their habits instead of traditional forecasts, and approach the risks subject to employer's liability insurance in a scientific and realistic manner, without leaving anything to chance, so that the policy can fulfill its function.
Do not neglect to take out Employers' Liability Insurance.
Wishing you accident-free and claim-free days.
(*) To learn about the resources available to you for information and services on this topic iletisim@zeynepturker-insurance.com
Comments