As the continuing period of economic austerity and uncertainty continues, businesses have to look at what measures they can take to reduce their outgoings and tighten their belts to ensure survival. In contrast, these same businesses are seeing year-on-year increases in their public liability and employer liability insurances.
This has led to a growing trend of businesses either increasing the self-insured limit of their policies (also known as their excess) or, in some cases, not putting insurance in place at all.
The first scenario offers a short term gain to businesses in that their insurance premiums are reduced however they would be required to pay a higher amount in the event of a claim being made against them (or the full extent of the claim depending on the self-insured limit) meaning that any savings on premiums could very quickly become a false economy. For those businesses without insurance in place, they would need to meet the full cost of the claim together with any legal expenses. Additionally, an uninsured party would not have the benefit of claims handlers who would be able to both advise on liability, and the potential value of a claim using an Injury Claims Calculator.
Both of these situations have a significant effect on personal injury claimants, particularly when the “at fault” business in question finds itself in financial difficulties. Where business is either uninsured or has a high self-insured limit and the business is unable to meet the cost of the claim (most commonly where the business is in administration or where the business owner is insolvent) there is a real risk of the injured person receiving little or nothing from the “at fault” party. The injured person would be treated as an ordinary creditor of the business (i.e. they have no security over the assets of the business) and like all other ordinary creditors, the injured person would find themselves in the position of recovering little or nothing of the value of their claim against the business.
Employer and public liability claims procedures sit in stark contrast to motor insurance claims where claimants are offered additional protection by virtue of the European Community (Rights Against Insurers) Regulations 2002 and the Motor Insurers Bureau (MIB), with the former allowing a claimant to pursue an action directly against the insurer of a vehicle (rather than the at fault party) and the latter offering a compensation scheme for those injured the hands of uninsured or untraced drivers.
It is of major concern that no such similar safeguards are in place for employees or members of the public who surfer injury at the hands of another party. One has to ask why the Association of British Insurers (ABI) have not taken any steps to address this situation which is occurring on an increasing scale as more businesses fail in the current economic climate. A system similar to the MIB would at least offer some form of safety net to these ever-increasing number of resolved claims. Until such time as a change is made in this area of insurance, the only advice that can be given is… be careful where you are injured.
This article was written by Watermans Solicitors, one of the leading Personal Injury Solicitors in Glasgow, you can read more posts like this on their official Website’s blog.