Insurance Surveyors – What Role Do They Play?
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There is usually a clear distinction between the role of a surveyor as advisor and that of the underwriter as the decision maker. The underwriter has ultimate responsibility for rate setting and determining the risks. The underwriter is not therefore simply looking at the technical risk but will have wider commercial interests to take into account.
The surveyor has been described as the eyes and ears of the underwriter. The surveyor has the expertise in inspecting premises and recognising good and poor features of the risk.
The surveyor must keep up to date with statutory and technological developments, changes in trade processes/practice and current thinking on labour relations with particular reference to health and safety organisation.
The surveyor must be fully knowledgeable with policy covers and be conscious of underwriting problem areas. The surveyor must look for those features, which are likely to cause accidents or have actually done so in the past. The surveyor will pay attention to all aspects of the risk, and in particular the housekeeping, the condition of the stairways and passageways, the lighting and the space available.
When a surveyor visits a premises he / she looks for areas which could cause injury or damage. Of course each risk is different as each risk will present its own particular set of hazards, for example, in a large multi-unit property whether it be used for residential letting or commercial letting there should be a fire alarm system in place and this should be serviced regularly.
The surveyor should visualise how accidents can happen and suggest ways of avoiding them. The surveyor must liase with the Insured’s safety employee, highlighting the risks and explaining how improvements can be effected. The surveyor must also follow up to ensure implementation, and may set a time frame for the work to be completed and this should be completed within the time frame in order to allow continuance of full cover under the policy.
Employers Liability Risk
If the surveyor is not satisfied that all relevant legislation is being complied with, the Insurer is unlikely to accept the risk at all until compliance is achieved. The complexity and detail of the survey will depend upon the nature of the work, particular hazards and the employer’s attitude towards their legal obligations. The surveyor will be focusing on what can cause injury to employees and so will be particularly interested in the exact business process and also the safety aspect including personal protective equipment provided. Work carried out away from the premises is a key area also.
The following information is very important and is vital that a surveyor should pick up on for employers liability risks:
The Insured: Full registered name of the firm and its legal status: information on the ultimate owners/parent and subsidiaries
The Premises: The building it self- the age of the building, it been well maintained. Property: type of activity undertaken at the premises: the presence of warning and safety notices/equipment: is the premises suitable for the activity undertaken. Are the premises shared by other occupants? If so what activity do they undertake..
Employees: The number of employees: level of qualifications, sub-contractors information on employment contracts, level of staff turnover etc.
Regulation and compliance: The applicable sections that the firm must adhere to. Have there been any breaches and / or fines imposed. Are there any prosecutions pending?
Information on the product/service provided: Delivery information
Plant and machinery involved: Its state and service record, is it properly protected
The material/components being used: Is appropriate protective gear being worn?
Procedures and guidelines: Are they being adhered to and are breaches being recorded on the system
Training Manual and courses: Are these been held in-house or external. Are they relevant to the work undertaken- Are all these courses been logged.
Accident Log Book: Review of incident register. Is it consistent with the proposal forms, are there any incidents which are likely to give rise to claims- Who manages this and are they reviewed regularly
Public Liability Risk
The insurers would be interested in any work away from the premises involving heat and the exact work that is been undertaken on the premises.
The below information is what a surveyor should pick up on for Public Liability risks:
The Insured: Full registered name of the firm and its legal entity: detail registration numbers: details on ultimate owners and parent, information and subsidiaries.
The premises: the location of the premises. Is the plant properly protected?
Are there any other work places which the firm is involved with. Are mechanically propelled vehicles been used
What are the procedures for allowing and the supervision of visitors to the premises- Are these recorded
What Procedures are in place for disposal of waste/ storage of finished goods and materials
Log Book: Review of the incident register involving third parties
Product Liability Risk
There are some areas in which a surveyor may make recommendations or requirements regarding a products Liability risk.
The following is the critical information that a surveyor should pick up on:
Details of activities undertaken
Information on checks and quality controls prior to dispatch
Information on the products produced, who are the end users. Do they require specialist training
Design controls: Who is responsible for design functions, is it done in house or done abroad
Compliance and regulation: Have there been any breaches or are there any cases pending
Review of customer complaints and product returns- Is there a customer complaint procedure
Surveys and Moral Hazard
Moral Hazard arises from the attitude and behaviour of people. The task of the surveyor is to establish key aspects of moral hazard e.g.
- Untidy and poorly controlled premises
- A disregard for employee training and safety
- A poorly trained workforce with rapid staff turnover
- An indifference to safety
- Unwillingness to spend money on improvements
- A lack of information, or the inaccuracy of information
Loss Control Surveys
Insurers undertake loss control surveys for liability risks and it is in this area that Insurers can offer practical contribution towards accident prevention. Some Insurers offer a special safety and loss control service to their policyholders to identify the possible hazards. The extent to which surveys are undertaken depends on the underwriter / insurer.
Surveys may be undertaken by engineers, by specialist surveyors and by claims assessor/inspectors. A survey is often carried out at the inception / commencement of a risk, thus enabling the underwriter to assess the hazards and processes involved. It is also desirable that there should be further surveys at regular intervals, especially when there is a change in any manufacturing process or deterioration in the claims experience.
Benefits of a loss control survey;
Whilst surveys address various physical issues, they also focus on the organisation and management of safety. Without the management and the will to pursue an organisation of safety, no amount of protective equipment will ensure the success of an adequate safety programme. The benefits of a loss control survey may include:
- Improvement of the safety record
- Fewer losses through direct and indirect causes of accidents
- Less or no prosecutions if action is taken on the surveyors recommendations
- Avoid financial loss and adverse publicity.
- Improves working moral in a company.
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Remember – A surveyor may be appointed by your Insurers to assess both the physical aspects of the risk and you or your companies’ attitude towards the risk i.e. are there any obvious hazards. A physical hazard is a physical condition that increases the possibility of a loss. Moral hazards are losses that results from dishonesty and the attitude and conduct of people.
