Recently, major production safety accidents such as coal mine gas explosions and fireworks factory explosions have occurred one after another, and the heavy casualties have once again sounded the alarm for safety production. After the disaster, while questioning whether the corporate responsibility and industry regulatory responsibility have been implemented, safety production liability insurance (hereinafter referred to as "safety liability insurance") is also a topic of discussion.

Safety liability insurance refers to commercial insurance in which insurance institutions compensate insured units for personnel injuries and economic losses caused by production safety accidents, and provide accident prevention services. The revised "Work Safety Law of the People's Republic of China" in 2021 clearly stipulates that eight high-risk industries and production units, including mining, hazardous chemicals, fireworks and firecrackers, and transportation, are required to purchase mandatory security liability insurance. The mandatory nature of liability insurance is similar to that of compulsory traffic insurance in car insurance. It is not an optional item for enterprises, but a mandatory question.

In production and operation, enterprises are the first responsible persons for safety production, and they must establish the awareness of safety first and establish a sound safety production responsibility system. Before 2006, China had been implementing a safety production risk deposit system in the field of safety production, and regulatory agencies intended to use the risk deposit to fulfill the safety production responsibilities of enterprises. The establishment of the liability insurance system introduces a market-oriented risk sharing mechanism for enterprise safety production. On the one hand, it improves the efficiency of handling liability accidents and the effectiveness of government public management. On the other hand, it also avoids the dilemma of enterprises going bankrupt due to huge compensation after accidents.

According to relevant regulations, insurance institutions that undertake security liability insurance should provide accident prevention services, which are equally important as post event compensation. In March 2025, seven departments jointly issued a revised version of the "Implementation Measures for Safety Production Liability Insurance", requiring insurance institutions to invest no less than 20% of the actual premiums collected into accident prevention services to ensure service quality. In other words, from its inception, liability insurance has been designed as a risk management tool that integrates post compensation and pre prevention. Its value lies not only in how much money is paid after an accident occurs, but also in building a governance loop of "security interaction", that is, using the economic leverage of premiums and professional risk control services of insurance companies to force enterprises to reduce the probability of accidents from the source and avoid tragedies.

However, in practical operation, the pre emptive function of liability insurance has not been fully reflected. For a long time, liability insurance has become a product that can be purchased in the insurance market. Many companies are not fully aware of the role of liability insurance and only purchase it to meet compliance requirements. The most important concern for enterprises is not what kind of accident prevention services insurance companies will provide, but whether the prices can be cheaper. In order to reduce costs, enterprises often only purchase basic guarantees with the minimum coverage.

On the other hand, frontline insurance salespeople continuously lower rates and lower policy prices in order to win customers. When prices are lowered to a certain extent in competition, even if 20% of the premium is used for accident prevention services, only some perfunctory activities such as online lectures, paper training, and distributing safety manuals can be done.

Moreover, some insurance companies still have situations where accident prevention costs are "raised but not used". In January of this year, the Office of the Safety Production Commission of Guangxi Zhuang Autonomous Region held talks with nine insurance companies, pointing out that "the proportion of prevention costs is low" and "the per capita coverage is not up to standard". It required all companies to strictly set aside and invest no less than 20% of the total premium amount when formulating the 2026 safety liability insurance accident prevention service budget, and resolutely prevent phenomena such as "only providing without using", "misappropriating expenses to pay bonuses or make up for other expenses".

Over time, the liability insurance market has formed a vicious cycle of "low price order grabbing - insufficient premium - inability to prevent and control - high incidence of accidents - intensified losses". In 2024, the national liability insurance premium income was 17.9 billion yuan, accounting for only 1.06% of the property insurance premium; At the same time, the operation of liability insurance is generally in a loss making state. By 2025, the three largest property and casualty insurance companies, China People's Insurance, Ping An Property and Casualty Insurance, and Taiping Property and Casualty Insurance, will all experience losses in their liability insurance business.

Since November 1st last year, the integration of non auto insurance reporting and management has been officially implemented, which requires non auto insurance businesses to strictly comply with the registered insurance terms and rates, and to truthfully allocate various operating and management expenses. This regulatory action is aimed at addressing issues such as violating the bottom line of risk pricing and disorderly low price competition. According to regulations, Anqi Insurance must complete the re filing before January 1, 2026.

While eliminating illegal behaviors such as low price competition and commission rebates, the healthy development of liability insurance also requires more professional and refined regulatory rules. The Implementation Measures for Safety Production Liability Insurance stipulate that safety liability insurance rates are subject to industry differential rates and floating rates, but currently there are no rate standards or demonstration clauses specific to different industries and regions.

Relevant regulatory departments should formulate different fee standards based on local disaster risks, industrial structures, and accident rates, and implement graded pricing and differentiated pricing. For example, coastal areas with frequent typhoons and areas with concentrated high-risk industries can moderately increase their rates, while inland low-risk areas can reasonably lower their rates.

In addition, it is necessary to implement a dynamic adjustment mechanism for insurance rates, linking the adjustment of safety liability insurance rates with the accident records and illegal and dishonest behaviors of enterprises. Only by allowing insurance premiums to truly reflect risks, can insurance companies have sufficient funds to invest in substantial risk reduction services, and also force enterprises to pay attention to production safety and eliminate violations.

At the same time, regulatory authorities should strengthen supervision on the extraction and use of accident prevention expenses, and eliminate phenomena such as "giving up without using it" and "going through the motions" in accident prevention activities.

Enterprises should deeply recognize the role and necessity of liability insurance, and pay more attention to "whose services are more practical" when configuring liability insurance, rather than just "whose rates are lower". Thoroughly investigating hidden dangers in workshops, warehouses, and production lines is like a 'safety check', which can identify long neglected risks and prevent accidents from occurring. For enterprises, this is a long-term and tangible profit.

Insurance companies need to break out of the quagmire of low price competition and truly implement the "insurance+service" scenario in order to win the long-term trust of customers; Only by placing accident prevention in a more important position and helping enterprises nip risks in the bud can we minimize compensation and achieve long-term sustainable operation.