Posts tagged Insurance

If you own or operate a pub or nightclub then you’ll know how hard it is to obtain adequate public liability insurance at a reasonable price.  Unfortunately there have been some very public and expensive incidents in this industry. Unless you can prove to an Underwriter that your risks re lower than the industry norm or your controls are superior then you will be “tarred with the same brush” as the cowboys of the industry and pay a premium for your insurance cover.

To create a powerful strategy for Public Liability Risks and Insurance, the venue must:

1. Provide a detailed explanation of its activities

2. Understand Risk Management Principles

3. Create a Risk Management Plan

4. Identify and treat risks

5. Reduce its exposure to risks

6. Drive the strategy form Board level to ensure its effectiveness

Risk Management

Responsible venues act as if they are uninsured. They do not want to be the cause of loss or damage to guests which could, in turn, involve financial loss to the venue. They take positive action to work out how this may arise and what can be done to prevent injury or damage to third parties and the resultant financial loss to the organisation.

Every Risk Management strategy implemented is a cost saving because it means that more of the risk can be retained by the venue. Risk Management philosophy should be established at all levels from Senior Management to Safety Committee to Staff Members and Security Contractors.

State WHS Regulations require all workplaces to follow Risk Management principles. The Risk Management Standard AS/NZS 4360 provides another explanation of the risk management process:

1. Establishing the Context

Establish the strategic, organisational and risk management context in which the rest of the process will take place. Criteria against which risk will be evaluated should be established and the structure analysis defined.

2. Identify risks

Identify what, why, and how things can arise as the basis for further analysis.

3. Analyse risks

Determine the existing controls and analyse risks in terms of consequence and likelihood in the context of those controls. Your analysis should consider the range of potential consequences and how likely those consequences are to occur. For example, if a person trips near the bar what are the consequences if they are carrying a glass or fall against a piece of furniture or another patron? Consequence and likelihood may be combined to produce an estimated level of risk.

4. Evaluate risks

Compare estimated levels of risk against the pre-established criteria. This enable risks to be ranked and allows the venue to identify management priorities. If levels of risk established are low, then risks may fall into an acceptable category and treatment may not be required.

5. Treat risks

Accept and monitor low priority risks. For other risks, develop and implement a specific management plan, which includes consideration of funding.

6. Monitor and review

Monitor and review the performance of the risk management system and changes which might affect it.

7. Communicate and consult

Communicate and consult with Staff Members and Management at each stage of the risk management process and concerning the process as a whole.

Risk Management Plan

The Risk Management Plan is probably the most important document that the venue can produce. Your venue may already have a RAMP but this does address all aspects of guest safety. The plan should contain details of all of the risk management initiatives currently underway, who is responsible, completion date and status. Any completed initiatives should stay on the plan as a record of achievement and also to ensure that they are monitored and reviewed in the future as appropriate.

Some Insurers will demand details of your Risk Management Plan. They will be vitally interested in it and it could mean the difference between risk acceptance and decline or higher versus lower premiums.

The Risk Management Plan should include details of any ongoing Risk improvements.  Any major activity such as a refurbishment or special event should have its own Risk Management Plan detailing issues identified, controls and responsibilities.

Review of the Risk Management Plan should be an agenda item at every meeting held at the venue.

Public Liability Portfolio

Your venue should begin putting together a detailed Public Liability Portfolio. The Portfolio is an extension of other documents such as your RAMP, Operations Manual or Staff Manual and includes additional information about the venues operations, exposures and controls which are more of interest to Underwriters. Gone are the days when the majority of Public Liability risk could be transferred through the purchase of substantial insurance cover at relatively cheap rates. Your interests and the interests of Insurers have converged. Your submission must be comprehensive and compelling. You must leave insurers in no doubt as to what you do, how you minimise the potential for claims and how you plan to continually improve the acceptability of the venue’s risk exposure.

Benefits are:

• The document will provide comprehensive and impressive information to insurers. It will demonstrate a high standard of risk management to insurers and may enable the venue to obtain adequate insurance cover at a reasonable rate.

• Staff involved in the compilation process will gain a more thorough understanding of the venue’s operations and inherent risks.
• It will provide evidence of high level of commitment to risk management and assist in mitigating any claim of negligence made against the venue.
• It will assist handover in case of personnel changes
• It will complement existing Risk Management and OH&S initiatives

The portfolio should continually grow and evolve and contain all relevant public liability material including but not limited to:

1. Complete description of the venue including history, size, site plans, layout, facilities, number of bars, services, hours of operation, future plans etc
2. Type of special events and entertainment provided. Facilities such as dance floors and where they are positioned and maintained.
3. All relevant procedures.
4. List of staff and responsibilities in regards to Public Liability,
5. The venue’s RAMP and general Risk Management Plan,
6. Details on the venue’s demographic.
7. Busiest times and what additional measures are taken (ie security, cleaning).
8. Details on previous serious incidents and claims and what has been done to prevent recurrence.
9. List of major exposures identified and how they are or will be controlled.
10. Emergency Procedures
11. Life Safety Systems (fire doors, exit signs, EWIS etc) where they are located and who maintains them
12. Fire Protection Systems (ie smoke detectors, hose reels, fire extinguishers) and where they are located, who monitors them, who maintains them.
13. Security procedures and controls (ie Guards, CCTV, alarms etc)
14. Details regarding catering contracts and Food Safety Procedures.
15. Contractor management (selection, safety planning, insurance, review).
16. Hazard inspection procedures.
17. Staff training requirements and resources.
18. Cleaning procedures including glass collection, spill procedures and cleaning of toilets.

Site Safety Committee

Depending on the current staffing levels and the degree of risk, it is recommended that a Safety Committee be formed and dedicated specifically to your venue.

The Committee should be encouraged to avoid being a “hazard spotting committee” but one that ensures risk management systems are in place and continually used. The Committee should also monitor the venue’s Risk Assessed Management Plan.

Safety Committees also work more effectively if they are given their own self managed budget for improvements. Rather than waste the money, experience has shown that the Committees actually become more frugal and creative in the way they control risks and generally come up with much more effective solutions.

Safety should also be a permanent agenda item on any general Staff Meetings held.

Hazard Identification

One of the tests used to determine negligence in a Public Liability Case is that of foreseability or, should you have known that a hazard existed and that a person could be injured. If you conduct comprehensive, formal, regular and written hazard inspections and identification tasks then you are likely to pass the “foreseability test”. Hazard Identification is also the first step in proper risk management.

Many venues have a WPHS Checklist available but may not be vigilantly used. The checklist should updated to include any public safety related items (ie trip hazards) and be used by members of the Safety Committee on a rotational basis. This update should include basic daily checks and more in-depth checks on a weekly and monthly basis.

Checklists specifically modified to suit each of the venues levels or different operations are useful in that they ensure that all relevant issues are considered however they can sometimes be restrictive or too focused and not pick up on irregular situations. The checklist will however provide documentary evidence that an attempt has been made to identify hazards.

• Identified hazards should be recorded in a log which, if major can then be subject to further risk management process (assessment control etc) or, if minor, fixed immediately and “written off”.  A quality approach to hazard control will ensure that any controls implemented will be regularly monitored and reviewed.
• Senior Management should be involved in regular review of the identification and control process.
• Inspections should include the work or performance of contractors.
• Systems should also be in place to collect and react promptly to information on hazards that arises informally such as from guest complaints or noticed by staff whilst performing normal duties.
• The most important form of hazard identification is that associated with actual incidents. Every incident should be carefully examined, regardless of the severity of injury and preventative strategies implemented.
• Information should also be sought from various sources such as industry associations, Liquor Accords etc about hazards that have been identified at other venues.
• A powerful activity is to have employees from other similar venues conduct hazard inspections as this overcomes the problem of familiarity or conditioning and is a good knowledge sharing exercise.

Claims Management

No matter what the venue does to prevent incidents, they are still inevitable, given the inherent risks of pubs and nightclubs and the unavoidable human factor. This means you should devote additional time and energy to post incident or loss strategies. If you manage claims well you can make a significant difference to what the ultimate loss is. Early intervention is the key.

You should ensure that there is continual positive communication with injured guests. Do not let them feel ignored. If the venue is at fault or negligent, then you must get on the front foot and do something about it. It will be cheaper in the long run than having a court decide.

All too often we have heard of people injured in public places or venues and when they report the incident they are immediately told “please send all communication via a Solicitor” and of course they then do. Many organisations are under the impression that if you try to help a person then that is an automatic admission of liability. The fact is many people actually only decide to claim because they were so poorly treated.

In consultation with your Broker you should develop a detailed claims management procedure.

Incident Report Forms should to be completed for all incidents, no matter how innocuous they may appear to be.  Any CCTV footage which may record the incident should copied be marked in relation to the incident and permanently retained.

Courtesy calls should be made to all members or guests involved in an incident (Liaise with your Insurance Company first).  These should be made within one and three working days after the incident occurs.  Full and detailed file notes of each call should be made and recorded on the incident report form (or on a separate sheet if insufficient space).  If a person can not be reached by telephone then a letter should be sent on the fourth working day.

Where appropriate, matters involving property damage and small personal injury matters involving reimbursement of medical expenses below say $150.00 could be promptly settled.  The offer of settlement should be accompanied by a letter stating that it is made on a “without prejudice basis and without an admission of liability” basis.

You could also consider the appointment of a Specialist Claims Handling Firm. They will assist in resolving claims quickly, thus reducing the cost of legal actions and will assist in setting up incident reporting systems, train staff, analyse data etc.

Incident Investigation

Very few venues conduct thorough incident investigations following an incident or injury. There is no better time to identify hazards, determine cause and implement preventative strategies. Many people fear that a thorough investigation will uncover harmful information. Truth is, this information will be still be uncovered (the hard way) in a serious case and the Courts (and insurers) will be much more impressed by an organisation that takes all positive steps to determine cause and prevent recurrence.

Incident investigation is the systematic reconstruction of the occurrence.  It is important to collect as much information as possible at the time of the incident as it is likely that key contributory factors may not be the same at a later date.

The main aim for incident investigation should be to put measures in place to prevent re-occurrences and not to assign blame. Usually, in the case of claim, a Liability Assessment will be carried out by an Insurer appointed Loss Assessor and the information gathered in your initial investigation will be essential for a productive assessment.

Contractor Management

Contractors (including cleaners, tradesmen, and performers) may not have the same level of concerns or understanding of the venues approach to ensuring the safety of guests. They should be closely monitored and where appropriate they should submit a Job safety Analysis or a Safety Plan. You should ensure that all contractors carry appropriate levels of Public Liability Insurance.

If you need assistance with developing an impressive portfolio contact Riskex

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