Making Sure Your Self Insurance Complies With Regulations
Compliance with self insurance regulations is critical
. It's a legal obligation on self-insured businesses. The alternative is not having self insurance, and that's definitely not the preferred option. Compliance management issues can be difficult, particularly if you're only just starting up your self insurance systems. There are several ways of ensuring you're compliant, and you'll find they're pretty easy to work with.Self audit- What it involves
Self audit is a full structured audit and reporting of safety management systems, requiring documentation and a good knowledge base in relation to compliance requirements. This can be done in-house if the expertise is available. The process also serves as a good check on the operational status and efficiency of the safety measures involved.
However, there are also some issues with self audits which require caution on the part of management with regard to compliance. Compliance with self insurance regulations requires a high level of comprehensive current knowledge and thorough understanding of related practical issues in terms of safety management. That's not always possible, and a business may find that it doesn't comply with requirements, despite its best efforts.
The requirements for self insurance licensing aren't onerous, but they are unambiguous. A business is either compliant, or it isn't. The various regulators, as the administrators of self insurance licensing is supportive to the best of its abilities, but has no options in terms of determining compliance requirements. Simple omissions can create problems, and worse, the bureaucratic treadmill of documentation and related issues. This situation must be avoided.
External audit- the main alternative to self audit
External audits are conducted by risk management consultants. These are full audits, conducted strictly according to compliance requirements. The great advantage of external audits for businesses are that they provide extremely useful information, as well as managing compliance issues in detail. This can be truly invaluable, particularly when finding problems that might have slipped under management's radar.
External audits cover each aspect of safety management systematically, and provide a full report of the status of each statutory requirement.
Without getting too technical, an example:
Business A has an OHS program and a workers compensation scheme formulated three years ago.
The problems are:
The related documentation hasn't been updated to take into account new statutory requirements, or the new operational issues.
A new raft of regulator requirements has made the OHS program partly obsolete, and the program hasn't been redrafted.
Worse, the new operational practices aren't covered at all in any documentation, and the OHS system itself hasn't been revised.
This is the formula for a completely avoidable bureaucratic nightmare. The business is definitely not compliant, and its self insurance license is at risk. External audits make excellent warning systems for situations like these, and can identify what needs doing immediately.
Getting advice and support
Many major employers retain external risk management consultants to ensure full compliance. The cost benefits are immense, and management benefits from maintaining a well organised safety management system without added burdens to its internal administration.
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