{"id":48812,"date":"2024-10-15T14:04:00","date_gmt":"2024-10-15T12:04:00","guid":{"rendered":"https:\/\/www.accuracy.com\/?p=48812"},"modified":"2024-10-29T15:24:13","modified_gmt":"2024-10-29T14:24:13","slug":"is-insurance-a-precautionary-approach","status":"publish","type":"post","link":"https:\/\/www.accuracy.com\/en_gb\/is-insurance-a-precautionary-approach\/","title":{"rendered":"Is insurance a precautionary approach?"},"content":{"rendered":"

Although the concept first appeared in Germany in the 1970s, it was not until 2004 that the \u2018precautionary principle\u2019 was incorporated into the French Charter for the Environment, and then introduced into the Constitution of the Fifth Republic a few months later. This 20th anniversary of the precautionary principle invites us to assess its effects, balancing the principle of abstention and the principle of action.<\/p>\n

It was first and foremost to act \u2013 and act quickly \u2013 that this principle was instituted. Its originality lies in moving away from the requirement of proof to justify a decision. Even if knowledge is insufficient, and even before a causal link has been scientifically established, public authorities must do everything possible to prevent damage to the environment or public health.<\/p>\n

Precaution is therefore distinct from protection against dangers, with the main difference lying in the identification of the risk: public authorities \u2018protect\u2019 against identified risks, but they must also exercise \u2018precaution\u2019 with regard to risks not yet 100% identified (as in the case of the avian flu crisis in 2005), or even in the absence of risks (if, for example, the aim is to maintain an environmental resource unchanged). In other words, there is no need to wait for proof of damage before taking action! The precautionary principle is, therefore, less one of inaction than of action in the face of uncertainty.<\/p>\n

Another distinction is between the insurance approach and the precautionary approach. Based on foresight, insurance behaviour seems to correspond to a precaution: by anticipating possible future damage, albeit with uncertainty around its individual impact, insurance aims to protect against the effects of a risk occurring. However, there is a fundamental difference between the insurance and precautionary approaches.<\/p>\n

To paraphrase the philosopher Fran\u00e7ois Ewald, in insurance, we believe that the risk is beyond our control \u2013 this is one of the definitions of chance \u2013 and that we must therefore accept it if it happens. But in the precautionary approach, we are aware that we are the potential instigators of the damage. Insurance deals with exogenous risks, whereas precaution deals with endogenous risks, that is, the risks we know we have caused.*<\/p>\n

Therein lies the link between the precautionary principle and increased responsibility for various actors, companies in particular. The precautionary principle can quickly inhibit the risk culture inherent in entrepreneurship because it compels us to \u2018exaggerate the threat\u2019 and, as a result, to \u2018do too much\u2019 to protect ourselves from potential liability. Excessive in itself, the principle of micro-precaution means that the smallest risk is given the greatest weight, freezing enthusiasm and innovation. \u2018The main problem with the precautionary principle is that it presupposes analysis of the risks, even before a project is launched. This is a powerful brake on innovation. In the United States, risks are measured after the event. This difference in approach may partly explain the difference in growth on the two sides of the Atlantic,\u2019 says economist Philippe Aghion.**<\/p>\n

As the saying goes, you can never be too cautious. But too much caution can be detrimental. So, how do you draw the line between too much and too little? Perhaps this requires a shift from the precautionary principle to an ethic of precaution: an attitude of prudence that does not become dogma.<\/p>\n

 <\/p>\n

*Fran\u00e7ois Ewald, Aux risques d\u2019innover. Les entreprises face au principe de pr\u00e9caution (2009) Editions Autrement<\/h6>\n
**Cited in French in the article \u2018Le principe de pr\u00e9caution ou vingt ans d\u2019anesth\u00e9sie
\nde la culture du risque en France\u2019, Anne de Guign\u00e9, Le Figaro, 5 July 2024. Original quote: \u2018Le principal probl\u00e8me du principe de pr\u00e9caution, c\u2019est qu\u2019il suppose une analyse des risques a priori, avant m\u00eame le lancement d\u2019un projet. C\u2019est un frein puissant \u00e0 l\u2019innovation. Aux Etats-Unis, les risques sont mesur\u00e9s a posteriori. Cette diff\u00e9rence d\u2019approche peut expliquer en partie la diff\u00e9rence de croissance des deux c\u00f4t\u00e9s de l\u2019Atlantique.\u2019<\/h6>\n

Download PDF ><\/a><\/p>\n

\n

Sophie Chassat – Partner, Accuracy\u00a0<\/strong>
\nAccuracy Talks Straight #11 – The Cultural Corner<\/em><\/p>","protected":false},"excerpt":{"rendered":"

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