Businesses urged to review liability insurance limits
Local commercial insurance specialists Alan & Thomas are advising businesses to urgently review their liability insurance protection as a result of a landmark personal injury compensation payout at the end of last year.
In December, seventeen year old student Agnes Collier was awarded a record breaking £23 million personal injury award after losing the use of her legs and most of the function in her arms as a result of a motor accident in November 2009, which also killed her mother. A bright young woman with excellent prospects, she now needs 24 hour care. Courts awarded her a £7.25m lump sum and £270,000 per year for the rest of her life.
Director at Alan & Thomas, Stewart King, is urging local businesses to review the levels of liability cover they currently have on their commercial insurance, “Other than motor insurance there are four main areas of insurance which provide cover for liability for personal injury or death; employers’, public, products’ liability and professional indemnity cover”.
“Employers are required by law to have employers’ liability cover of no less than £5 million although the vast majority of insurers provide £10 million of cover as standard. However, in light of this recent record breaking payout, that may not be enough any more and we are recommending businesses look at all three areas of liability cover and consider increasing them to no less than a total of £20 million ”.
Although the claim in question was the result of a motor accident, the same award would have applied if the claimant had been injured in an office, a factory or on a farm. The settlement is for injuries and subsequent care and does not relate to the circumstances that lead to them. A person of similar age with similar injuries arising out of a non-motor claim would have received the same award.
“We are recommending that business owners reflect on what would happen if their business was faced with a claim that exceeds the amount of cover they currently have? The reality is fairly simple; the business will almost certainly be responsible for the shortfall, which could ultimately mean financial ruin” warns Stewart.
“Premiums will vary business to business depending on size, sector and turnover but they may well be less than people would think so we would advise companies to speak to their insurance broker to obtain a quotation on their behalf. That way, business owners are able to make the most informed decision”.
Alan & Thomas, the only independent broker in Dorset to have been awarded the prestigious chartered broker status from the Chartered Insurance Institute, specialises in commercial insurance and risk management for a wide range of business sectors.