Insurance

Question 1

Direct Costs

Answer 1

Insurance

Court Costs

Fines

Lost time of injured employee and continued payments to employee

Damage to the equipment, tool, property and plant or to materials

Cost of any clean-up operation

Question 2

Indirect costs

Answer 2

Lost time by other employess who stop work or reduce performance

• Out of curiosity; sympathy
• Weakend morale

Lost time by supervisor or other managers

• Assisting injured employee
• Investigating the cause of the accident
• Arranging for the injured employees production to be continued by some other employee
• Selecting or training a new employee to replace an injured employee
• Prepearing accident reports, attending hearings, inquest courts

Interference with production leading to failure to fill orders on time

Loss of bonuses

Penalty payments and simillar losses

Replacement costs of materials or equipment

Question 3

Insured Costs

Answer 3

Employee/third party compesation

Damage to buildings and plant

Damage to vehicles, equipment and tools

Medical costsLegal costs of compensation and prosecution

Question 4

Unisured Costs

Answer 4

Product and materials damage

Emergency supplies and first aid

Clean up costs

Delays and weakend morale

Overtime and temporary labour

Increase in insurance premiums

Enforcemnet agency and court fines

Effects on goodwill and reputation

Question 5

Insurance Costs Ratio

Answer 5

For every £1 spent on insurance, between £8 - £36 is spent on unisured costs

Question 6

Employers’ Liability Compulsory Insurance (ELCI)

Answer 6

• Legal requirement for all employers under the Employers’ Liability (Compulsory Insurance) Act (ELCI) 1969
• An employer must have ELCI and be insured for at least £5 million per individual claim
• Section 3 of ELCI 1969 allows an exemption for certain employers e.g. councils, health service organisations and employers established under national ownership
• Covers the employer’s liability in the event of accidents and work related ill-health to employees and others who may be affected by their operations
• Ensures that any employee who successfully sues his employer following and accident is assured compensation irrespective of the financial position of the employer
• Made available either by display or electronically at each place of business