New reforms to change insurance claims process
Local insurance specialists Alan & Thomas Insurance Group are warning businesses that any insurance claims from 1 August this year will need to be notified to insurers as quickly as possible due to a reduction in timescales set out by the Ministry of Justice (MOJ).
The reforms, implemented by the MOJ following a review by Lord Justice Jackson in 2010 on civil litigation, are intended to bring more balance to the civil litigation system by making lawyers’ costs more proportionate, combating the compensation culture and creating an environment where insurers can pass on savings to customers through lower premiums.
Stewart King, Chief Operations Officer at Alan & Thomas, explains, “The reforms will impact on businesses two-fold. They may well see a financial impact with savings being driven by fixed and reduced legal costs but there will also be a significant operational impact as the timescales for notifying insurers of a potential claim will be reduced. Business owners and managers will need to ensure they have effective systems in place to expedite the notification of a claim to give the insurer as much time as possible to investigate and respond within the timescales set out by the MOJ”.
As well as applying to motor personal injury claims, the reforms will also include employers’ liability (EL) and public liability (PL) claims up to £25,000 in value. The number of working days to admit or dispute liability will be reduced from the current ninety days to thirty days for employers’ liability claims and from ninety days to forty days for public liability claims.
“These reductions mean that businesses will need to quickly supply their insurance broker with all relevant information relating to the incident so that they can liaise with the insurers on their behalf to determine liability and agree settlement more quickly”.
EL and PL claims will also have to be processed through the government’s online portal which, set up in April 2010, was originally for RTA motor personal injury claims with a value between £1,000 and £10,000. Use of the portal is designed to speed up the settlement of claims due to the strict timescales and fixed legal fees for the various stages of the process.
Up to now, as the portal has been used for motor claims only, in most instances claimants have been able to establish insurer details from the Motor Insurance Database (MID). As employer and public liability claims will also be included, there will be instances when claimants will not be aware of the appropriate insurer.
“In view of this, businesses may well receive a claims notification form at their registered address. We would urge business owners that if they receive such a form, they will need to contact the claimant immediately to acknowledge receipt of the notification and confirm that it is being sent to the insurer. If the timescales are not adhered to, this will impact on the costs the claimant solicitors can apply” concluded Stewart.
Alan & Thomas, Dorset’s only independent insurance broker with chartered status, has offices in Poole and Gillingham and specialises in insurance and risk management for a wide range of businesses. Their in-house claims department works on behalf of clients to report, process and settle claims.