MOI UNIVERSITY SCHOOL OF HUMAN RESOURCE DEVELOPMENT

DEPARTMENT OF DEVELOPMENT STUDIES BSc. IN HUMAN RESOURCE MANAGEMENT

COURSE TITLE: COURSE CODE: LECTURER: TASK:

EMPLOYEE HEALTH, SAFETY & SECURITY BHR 311 MRS WACHIRA GROUP ASSIGNMENT 1

1) ANNE MUTINDA

HRM/1114/09 HRM/1104/09 HRM/1112/09 HRM/2315/10 HRM/76/95 HRM/1118/09 HRM/2505/11 HRM/ HRM/1119/09 HRM/2320/10 HRM/2507/11 SS/131/07 (HRM/20/07) HRM/1101/09 HRM/1111/09 HRM/1115/09 HRM/2310/10

2) CATHERINE KAMAU
3) MAUREEN MAINA 4) ROSELYN ROTICH

5) ANNIE N NJUGUNA 6) FLORENCE MAERA 7) TIMOTHY MUTUA MUTUKU 8) JANET MWITA 9) CATHERINE NJERU 10) MARGARET BIWOTT 11) PAULINE KARANJA 12) JOY ANDERA 13) MELSA MESO 14) TOBIKO NKURAIYA 15) JOHNSON MACHARIA
16)

GITONGA LILIAN NJERI

QUESTIION:

THE ROLE OF INSURANCE IN THE HEALTH AND SAFETY OF WORKERS IN AN ORGANISATION

Definition of Insurance Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. An insurer is a company selling the insurance; an insured, or policyholder, is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated. Insurance, in relation to health and safety of workers in an organization, is a form of medical benefit for employees who are injured in the course of employment. Workers compensation policy provides coverage for lost income and medical expenses for employee work-related illness or injuries. Workman injury benefits (WIBA) for example provides cover in respect of bodily injury by accident or disease caused to employees arising our and in the course of employment. Insurance is an effective way of risk management and is defined as equitable transfer of the risk of a loss in exchange of a premium. Every quantified risk is insured. Employee liability is an insurance that any organization carrying out business must have to its employees working for the company. Workplace insurance refers to insurance that is either provided to employees by their employer or offered to employees through their place of work. It is a cost-effective way to get life, disability and income protection insurance.

Insurable risks at the work place include:1. Death 2. Injury 3. Health/medical 4. Accidents 5. Occupational diseases 6. Life

TYPES OF INSURANCE FOR THE ABOVE RISKS Health Insurance Health Insurance policies cover the costs of medical treatments for various types of diseases that threaten human life. In other words, it is a compensation for economic loss, reimbursement or

payment of medical and like expenses. Most organizations provide allow their employees to get medical treatment from hospitals at no charge, for which the organization is invoiced, while some organizations and even in the civil service, a certain percentage of the basic pay is paid as medical allowance to an employee to cover for health issues that may arise. This allowance may be paid monthly or annually, depending on the arrangements. Some organizations make arrangements and provide insurance cover directly from registered insurance firms and therefore their employees can receive medical treatment or other related services through the insurance company that eventually invoices the subscribing company. Disability insurance Disability insurance covers the insured individuals earnings against the risk that a disability can make working impossible for the employee. Disability insurance policies are arrangements to

secure ones future in case the individual is unable to work and earn. Casualty Insurance or accidental death and dismemberment insurance This insurance covers death and injury that results from accidents that may cause death or casualty to an employee in the course of their duty at the work place.

Life Insurance Though life is priceless, there are measures to insure it under the policies that provide a monetary benefit to the dependants of the diseased individual/employee. They aim at providing the insured persons family with expenses such as burial and funeral expenses. The benefits are payable to the dependants of workers killed during employment. Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individuals death or other event, such as terminal illness or critical illness. Statutory compensation law provides advantages to employees and employers. A schedule is drawn out to state the amount and forms of compensation to which an employee is entitled, if he/she has sustained the stipulated kinds of injuries. Benefits of insurance at the workplace 1. It attracts, motivates and helps retain competent and talented employees in organization. This extra employment benefit helps create a more committed and effective workforce. 2. It helps to align benefits packages with those offered in the market. 3. It helps to promote higher levels of morale among employee and thus further helps to reduce absenteeism amongst employees. 4. It gives both employers and employees peace of mind and this enables the organizations and employees to concentrate in their work leading to high productivity. For example, it offers health security to the employees and their families.

5. It provides opportunities for promotion or advancement as workers retire or move to other positions within the organization. 6. It helps the organizations to improve their corporate image and therefore becomes an employer of choice. Providing insurance or providing access to voluntary scheme sends a message to the employees that their wellbeing and future is taken well taken care of. It helps to retain the business from loss of key employees, for example, untimely death of a key employee can pose severe financial loss to the business. 7. It reduces stress-related situations in organizations because insurance protection benefits helps employees to financially manage their situations when sick and they need medical attention. 8. Helps to manage the unforeseen losses including lawsuits.

Health insurance policies cover the cost of medical treatments. Dental insurance, like medical insurance, protects policyholders for dental costs. In the U.S. and Canada, dental insurance is often part of an employer's benefits package, along with health insurance.

[edit] Accident, sickness and unemployment insurance

Workers' compensation, or employers' liability insurance, is compulsory in some countries

Disability insurance policies provide financial support in the event of the policyholder becoming unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgage loans and credit cards. Short-term and long-term disability policies are available to individuals, but considering the expense, long-term policies are generally obtained only by those with at least six-figure incomes, such as doctors, lawyers, etc. Short-term disability insurance covers a person for a period typically up to six months, paying a stipend each month to cover medical bills and other necessities. 6

Long-term disability insurance covers an individual's expenses for the long term, up until such time as they are considered permanently disabled and thereafter. Insurance companies will often try to encourage the person back into employment in preference to and before declaring them unable to work at all and therefore totally disabled. Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work. Total permanent disability insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance. Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expenses incurred because of a job-related injury.

[edit] Casualty
Main article: Casualty insurance

Casualty insurance insures against accidents, not necessarily tied to any specific property. It is a broad spectrum of insurance that a number of other types of insurance could be classified, such as auto, workers compensation, and some liability insurances.

Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement. Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions could result in a loss.

[edit] Life
Main article: Life insurance

Life insurance provides a monetary benefit to a descendant's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies, are regulated as insurance, and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance. Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed.
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In many countries, such as the U.S. and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death. In the U.S., the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles (e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation.

Burial insurance
Burial insurance is a very old type of life insurance which is paid out upon death to cover final expenses, such as the cost of a funeral. The Greeks and Romans introduced burial insurance circa 600 AD when they organized guilds called "benevolent societies" which cared for the surviving families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose, as did friendly societies during Victorian times

REFERENCES Occupational Safety and Health, Wikipidia, encyclopedia Nyakango B. Jane (2011) part of the IUPAC Congress in Bejing, on Wednesday, August 17