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There are a number of specifics problems addressed on this page and if you have
any other excuses or questions that you may like to forward please email us on compo@xtra.co.nz or phone us at our Christchurch
Head Office on 03 3488 506.
Do you have an approved safety system?
Workers Compensation is back - You must act now!
This page gives some typical responses that we recieve when we
call on businesses to offer our services or when offering to assist organisations with
Injury Prevention Systems. We gathered up the typical excuses and questions that we asked
and have given realistic explanations of the requirements and needs for approved Safety
Systems to enable the self employed, companies and organisations to save the
greatest amount of money on Workers Compensation Insurance now that there is
a real need to prove HOW SAFE YOU ARE!
- What is an approved system?
- Some Common Misunderstandings
- What ACC deregulation means
- Our Solution to your Problem
- The current ACC payment
- Options and choices
- Are there really 7 payments to ACC ?
- Can you save up to 50% of ACC?
- "I have not had an accident for about
20 years"
- "I have good Accountants, top flight
Lawyers and the best Broker"
- "Don't worry about it as we have
Directors & Officers Liability"
- "There will be a change of Government.
This will all go away"
- "Don't worry about OSH fines"
- "Is it really worth the effort of
doing all this stuff?"
- Getting up to 200% return on a management
system
- How a system is completed
- How an update is completed
- Please let us help you
 | An approved system can be audited by an external auditor to the
approved International Standards e.g. A/NZS 4804 and 4801 |
| There are about 50 steps that need to be considered |
| It is highly probable that the Insurance Companies will require
attributes and will not rely solely on past performance |
| There could be about 12 essential attributes |
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| "We have an approved OSH system"
 | A 3 step OSH system does not meet all of the legal requirements
and is only a starting point |
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| "We have had an OSH audit"
| An audit does not constitute a defence and does not qualify for
safety certification on its own |
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| "We have a Building Warrant of Fitness"
| A Building WOF under the Building Act 1991 only relates to that
Act |
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| There will be options and choices |
| All employers since 1 / 4 / 98 have been on the same footing and
this means that small employers will from now on face loadings (penalties) just like large
employers have for many years |
| To do nothing will mean substantial increases in fees and the
probability of major fines |
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| We sell, install and maintain high quality safety systems that are
tailored to the individual requirements of each customer |
| These produce major financial cost benefits in the new environment |
| In addition, our training helps reduce the number of workplace
accidents by about 70% on average |
| Our programmes also act as a reliable form of legal defence in the
event of an OSH safety prosecution, or a litigation under other acts |
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| Officials believe that up to 75% of injuries are not reported to
OSH and perhaps about 50% of serious injuries are not referred to ACC |
| The present ACC system payments may only meet about half of the
real cost of accidents |
| The present ACC scheme only collects enough money for the current
year - ie not for the whole cost of each injury (they often go for years) |
| The shortfall is about 40% of the real costs or approximately
$584m per annum |
| This is referred to as the wag of the tail that must be paid for
in coming years |
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| You cannot afford to do nothing - unless you are a sole trader -
in which case you can stay with ACC |
| Every other employer MUST make a choice to either go with the ACC
"Newco" or a private insurance scheme |
| Employers will take out cover effective 1 July 1999 for between 8
months and 18 months |
| Staff must be notified of the details of the insurance cover |
| Failure to make logical decisions will almost certainly mean extra
costs and huge penalties |
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- for 1999 there will be the second last lot of the present system
(this is payments in arrears),
- plus the wag of the tail at 65c in the $100 (15 years of these to
come),
- plus there will be an interim payment for the three months between
1 April and 1 July and this will average $1.84 per $100, per annum
- Then on 1 July there will be the first of the new system (paying
for the future)
- In the year 2000 there will be the last of the present system
(registered employers after 1980)
- plus the wag of the tail plus
- the second lot of the new system
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| Only very large companies can save up to 50% of the contestable
part of premiums (ie the portion that can be refunded each year) |
| It is possible however, for a typical medium sized employer to
save up to 50% of the total of - accident costs & premium costs |
| This can only be achieved by way of putting in place proper
systems and procedures |
| Statistical evidence is available to show that the average
employer (3-5 staff) would have one serious accident about every 3 years |
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| This would have been the most important criterion under the old
system |
| Under the new system the record of the past is only one factor |
| No insurer with international experience is likely to give out a
very low premium policy on the understanding that you have not had accidents for 20 years |
| The intelligent insurer will be looking for attributes such as
risk management, proper management system, external auditing, staff training, hazard
management and company doctor and staff appointment policies etc |
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| These professionals are unlikely to have adequate knowledge in
what is now a highly specialised field, requiring expertise |
| It may be possible for professionals to facilitate special
packages for groups of employers that pledge to meet strict performance standards |
| They will need to meet special conditions such as acceptance of
part of the risk and will need to do their own claims management |
| WARNING! Be careful
when selecting an insurance broker. You must select an insurer who will be able to survive
financially. |
| The Government expects some brokers & insurers to fail (their
clients will pay for it) |
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| This type of insurance has a place for certain risks and duties of
Directors and Officers under the Companies Act |
| Some employers have taken out this type of cover for the Safety
legislation |
| The Solicitor General has warned that this type of insurance is
unlikely to work in Court for Safety legislation as this would be to defeat the intention
of Parliament |
| It would be like allowing people to take out insurance to cover
speeding fines |
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| Problems with the present system must be attended to - no
Government can ignore them |
| There must be collection of the wag of the tail by whichever party
is in power |
| We do not know of a single Government service that once
privatised, has been centralised again |
| ACC and Newco will continue to compete even if the private
insurers are thrown out by a change of Government |
| If the private insurers are thrown out by a new Government, they
will probably seek full compensation and litigate to sue for all their costs - and loss of
opportunity |
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| The current OSH fines are only up to $100,000 but in NSW they have
now been increased to $750,000 for a second offence |
| The Hazardous Substances legislation for NZ now has a maximum of
$500,000 |
| The fines under the ACC Amendment Act will be up to 2.5 times the
normal premium for those who forget and up to 5 times for those who deliberately forget to
arrange cover |
| Litigations in NZ are now three times as common as OSH fines and
range from $100,000 up to $7m each |
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| You firstly need to agree that these changes are for real and that
they will adversely affect all companies that don't want to know about safety |
| Companies that qualify for very low premiums and who decide to
then forget about it will then go into the normal bracket or into the bad bracket
| The very low premiums are likely to be 1-3% of payroll |
| The normal premiums are likely to be
4-7% of payroll |
| The bad luck premiums are likely to
be 8-15% of payroll |
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| Business people seek a return on their investment |
| A high return can only be achieved by meeting all the legal
requirements and by having proper systems and procedures |
| Summit Systems Ltd clients normally enjoy a high return on their
investment. The return is normally within two years of installing a system |
| After that there is usually an even greater return on investment
when clients do annual updates |
| Annual costs will be a few hundred dollars and the on-going
reductions in ACC and workplace insurance should be many hundreds of dollars |
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| The Consultant arranges with the client for a three to four hour
visit. During this visit there will be completion of licence agreement (5 minutes) plus
data set of 50 questions (90 minutes) plus site audit (60-120 minutes) |
| The Consultant then arranges for another visit about a month later
and in the meantime the information is processed by Head Office and certification is
arranged |
| The Consultant confirms the visit to complete the training of all
staff and managers. The training session is usually about 1 -2 hours |
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| A Consultant confirms the appointment - the cost was estimated at
the time of doing the system and formed part of the licence agreement |
| It usually takes about one hour to go through the Summit Systems
Safety Performance Audit (40 questions to check up on compliance standards) |
| It usually takes 1-2 hours to complete a site audit |
| There will also be a short training session of say 30-60 minutes
with staff to deal with any safety and insurance issues |
| Total time is between 3 hours for small sites to say 6 hours for
large sites. The hourly rate varies between $70 and $130 |
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| Summit Systems Ltd has top quality compliance systems that can be
installed in about 2 hours of your time and about 20 hours of our time (that you don't
need to worry about) |
| They can be easily updated and meet the international standards
for external audit |
| They come with an audit certificate that needs to be updated
annually |
| Workers Compo will negotiate with Insurance Companies for the best
deal for all the Summit Systems and Workers Compo clients |
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