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Countering The Compensation Culture


There is no doubt that all companies have a duty of care to their employees, the public and public property. If proven legally negligent - by action or inaction - then its fair to expect some compensation to be made. Im sure none of us have any problem with an injured member of staff or the public being adequately compensated, if the company is shown to be liable. However, the frequency and cost of liability claims has been increasing steadily for some years and the where there is blame, there is a claim culture is having a real impact on all our insurance premiums. Insurance companies have to increase the cost of cover across the board to compensate for these escalating losses. Several have been complicit in increasing the feeding frenzy by dispatching claims staff, armed with cheque books,within hours of an incident being notified to them. The legal fees in liability cases often outstrip the compensation. A recent example where an employee hurt his thumb at work saw him receive 1,200 in compensation, the legal costs to his solicitor were 5,000. His Insurers loss record shows a claim payment of 6,200 - this will have a direct impact on not only his employers insurance premium, but all liability premiums for that insurer. Higos is lobbying for the introduction of an independent personal injuries and assessment board, similar to that introduced in Ireland in 2004. This board has seen a massive reduction in legal costs and compensation awards, with insurance premiums being reduced by 15% - 20% since its inception. Until an assessment board is in place in the UK we would strongly encourage all employers to look closely at their risk management, to ensure they are covered by an insurer who is financially secure enough to be able to reward good risk management with significant premium reduction. Higos is perfectly placed to provide advice in this area. We would be delighted to give your company a free insurance health check - we have staff qualified to give up to date risk management advice in most industry sectors.

Posted by: Higos Insurance Services Ltd