AXA Business Insurance reports a rise of 162 per cent from 2009-2012 with British businesses ultimately having to foot the bill.
In 2012 alone, AXA saw a year on year rise of 75 per cent in the number of deafness claims and had more claims for deafness than any other type of workplace injury or illness. The company attributes the rise as a primary reason for an overall increase of over 30 per cent in Employer Liability claims.
The insurer is concerned that the rise in claims is being fuelled by compensation lawyers and claims management companies targeting potential claimants. And while there are obviously many genuine claims, the company has also seen evidence of a growing number of fraudulent claims. It believes the trend in these claims has many similarities to the massive rise in personal injury claims among drivers over the last few years.
David Williams, managing director, Underwriting, AXA Insurance, said: “The issue for British industry is that, as we have seen with other areas of insurance in the UK, lots of claims inevitably lead to higher premiums in order to cover the cost of payouts. As British business struggles through a prolonged period of recession, the last thing they need is the added expense that this will bring.
“We are very keen to work with British businesses, the rest of the insurance industry and government to put in place effective measures to stop this becoming the next whiplash.”
According to HSE statistics, around one million people in Great Britain are exposed to levels of noise that could affect their hearing. Current Control of Noise regulations require all employers to provide protection in any working environment where decibel levels exceed 85.
David Williams concluded: “We would urge employers to be really thorough in ensuring employees are provided with proper protection and that using it correctly is robustly enforced. By doing this they can help us nip this growing problem in the bud before it starts impacting on their bottom line.”
The Sale of Goods Act (SOGA) hub provides comprehensive and up-to-date guidance on the Sale of Goods Act for retailers and business support organisations.
All the training and promotional materials provided are available to access online or to download in a variety of formats. Business can print and save, add their own branding, copy and paste into existing documents or link to them via the business website or intranet, or share the information directly with members of staff.
The Distance Selling (DS) hub provides guidance for retailers and business support organisation on regulations affecting buying and selling goods and services via the internet, phone, mail order, email, interactive TV or text.
Businesses can use the information and materials on the hub by copying and pasting into existing documents, downloading and printing or by linking directly to their website/intranet.
Both the SOGA and DS hubs offer the facility to register to receive regular relevant regulation updates.
With Christmas approaching, and all expectations pointing to another bumper season for ecommerce and credit card transactions, fears are rising that most UK businesses are taking inadequate steps to safeguard customers’ credit card details.
Analysis by Ground Labs, the identity protection specialists, has found that the vast majority of UK businesses hold consumer credit card data unwittingly. Holding credit card details in this way is a breach of Payment Card Industry Data Security Standards (PCI DSS) compliance obligations and can attract up to a £500,000 fine by the Information Commissioner Officer (ICO) in a case of a data breach.
Latest figures show that £341 million was stolen in the UK in 2011 through credit card fraud. There is a global black market for credit card data and hacking incidents have risen by 19 per cent in the past six months. The UK is consistently among the top three most targeted countries and in August 2012 suffered 69 per cent of worldwide phishing attacks.
Retention of credit card data is an issue for businesses of all sizes. A random survey of security experts who use Ground Labs software across more than 100 consumer-facing businesses found that every one of them had credit card details unwittingly stored on IT equipment. On average more than 1,000 credit card records were found by Ground Labs’ software within each business sampled.
Even businesses that claim to be compliant with agreed global standards for credit card data security hold rogue details, the Ground Labs survey has found. There are various possible reasons for this, all linked to standard computer processes such as browser caches or email duplications.
Amongst the worst examples uncovered was a company that firmly believed it had no records. It was found that the business actually held more than 20 million credit card numbers on servers throughout its network.
“We have more than 1,000 businesses across the UK and Europe that have used our software and every single business found erroneous card records in its IT systems”, said European director for Ground Labs, Mohamed Zouine. “What we have found is that even those businesses that believe that their systems are clean are carrying records that could be easily acquired by hackers.”
Many UK businesses have adopted an open mind, accepting there may be hidden data, and have already taken steps to identify and resolve any possible problems. Ground Labs is advocating the use of a simple software programme called Card Recon as part of the standard systems maintenance routine to detect and remove credit card details.
Mohamed Zouine added: “We believe a routine check should be as frequent as anti-virus checks. There are many ways in which card details can remain on business’s IT infrastructure unwittingly. Transaction logs sent back from banks, browser caches, email duplications and more can hold sensitive data that has a black market value in the wrong hands and can be used to defraud consumers.”
Zouine added: “The issue for small businesses is that they are far less protected than large corporations. It is relatively easy for an entrepreneurial thief to steal IT equipment or hack in to a business and retrieve valuable credit card data.”
The software is also beneficial for consumers. A similar routine test of 50 PCs and laptops found that all but one of them held credit card details without the owner’s knowledge. “It is surprising to learn that many businesses continue prompting customers to email their credit card information as part of completing a transaction such as a hotel reservation for example,” Zouine commented.
Slade was speaking in the wake of the public criticism of several high-profile figures – including G4S’s chief executive Nick Buckles, Barclays Bank’s Bob Diamond and the Border Force’s Brodie Clarke.
Slade explained: “While these high profile cases hit the nation’s headlines for millions to see, open criticism of employees in much smaller businesses can also pose a real risk. If there are performance or conduct issues, you clearly need to deal with it professionally and properly. But that certainly must not include communications to colleagues who don’t ‘need to know’.”
He said that the people who spoke out in the G4S, Barclays and Border Force cases might have had good intention – and reports do suggest that there have been some fundamental mistakes and issues, for which someone must be accountable. But if employers in small businesses start to speak about problems with colleagues, this can easily be seen to undermine the individual, to the extent of making their position untenable. This in turn can lead to grievances and potential tribunal claims.
“If somebody says something in the public arena which is likely to break the relationship of trust and confidence between employee and employer, then that could be deemed as grounds for constructive dismissal by an employment tribunal,” Slade said. “Managers should always be vigilant in terms of what they say to whom about whom. We can all become frustrated with performance or conduct issues, and there is often a temptation to share those frustrations with others. But if you really don’t want to spend the time and effort in dealing with grievance and worse, then it is a temptation best avoided!”
Slade concluded: “It’s simply a matter of confidentiality and applying a sensible amount of discretion to avoid this happening. When addressing negative performance or conduct issues, make sure that it is always done in private. And never relay confidential information or personal opinions to that employee’s peers or direct reports.
“While in these high profile cases the companies may be in a position to afford a commercial compromise settlement when the employee in question exits the business, I doubt very much that most SMEs would welcome such a pay-out.”
British SME: Could you start by giving me an overview of Axa’s offering to SMEs
Darrell Sansom: Axa has been providing solutions to small businesses for a number of years. What we see, particularly in the micro sector – up to nine employees – and particularly trades and professionals is a month on month increase in searches through Google for business insurance policies. And combined with the feedback we were getting led us to believe there was a very strong appetite for an online experience.
There remained issues over the flexibility of the product and confidence in buying online. If you take home insurance, for example, there’s a belief that one policy is very much like another, therefore people feel competent enough to buy it. That’s different when it comes to commercial insurance. It’s about what do I need, how much do I need, when do I need it. And there’s less understanding of what different products do. So there was a belief that buying business insurance is complex.
So we’ve tried to remove those inhibitors to allow our customers to fulfil their requirements, and that’s what we’ve done with the investment in our new website.
BSME: What’s your involvement with StartUp Britain?
Sansom: The current economic climate means there are fewer options available for people. So people coming out of school or university are finding there are fewer jobs available, so starting a business becomes a real option. Then the larger companies are contracting, so you have people who come out with a bit of a redundancy payment and are looking for other options. So what we’re seeing is a community looking for a solution and we’re trying to support them in starting up a business and making it successful.
These people are experts in what they do, but they are not experts in being a business – a builder may be a great builder but that doesn’t necessarily mean he’s going to be great at running a builder’s business. You may not have the first idea of the need for employers’ liability insurance because you’ve never had to worry about it. And if you can get a new business through their first year, there’s a significant chance they will continue to flourish. We’re the insurance experts within this field but the role is wider than that – it’s about how we can support small firms get up and running.
BSME: From the research you’ve done, are there particular areas where start ups are failing?
Sansom: The biggest issue is cashflow – it can stop a business functioning. The business may be successful but if you can’t get the money in, money out stream correct, the business will grind to a halt. In terms of what people worry about, insurance actually comes quite far down the list – you’ve got regulation, employment law, tax – all the usual issues if you’re running a business.
BSME: And because the focus of a business is running that business, responsibilities like doing the accounts and so on tend to be done outside office hours – which makes having the option of buying products online more important
Sansom: From our point of view, we have all this online education, but if people still want to talk to us they can pick up the phone. So we have an advice team based in Glasgow who if at any part during the journey can be contacted by clients.
BSME: When it comes to the online offering, you have a very difficult balance to strike – the requirements of, say, a plumber, will be very different from those of someone who offers secretarial services?
Sansom: For the last 20 years or so, we’ve allowed businesses to pick from menu of the type of business that fits closest to what they do. So if you’re a plumber, you pick plumber. But our customers have been calling and saying, well I am a plumber, but my business also does a bit of this, and I don’t have any dealings in that. And that makes it more difficult to put people in a box. So to give people a better experience, we now allow people to describe their business much more fully, they can explain what they offer, whether they have assets, employees, where they work and so on. And that means your policy is a much better fit for you.
BSME: Do you feel that people broadly understand what they need before they come to you?
Sansom: Our online journey means we now have a significant amount of people who are confident about buying online. Those that do pick up the phone are usually looking for some comfort that they’ve got it right. There is a spectrum but what we have seen is that significantly more people are comfortable buying online.