You may have read how the government have changed the calculation method for compensation payments for serious injury cases. There has also been a lot of comment in the media that this will increase insurance premiums for private motorists, with particular concern for younger drivers, who may see larger increases. But do these changes have wider implications for business insurance too?
Whilst it’s too early to say what the exact effect of the changes will be, there could be an impact on the cost of business insurance.
If you are a business and insure company vehicles, then the additional costs referred to for private motorists are likely to apply to owners of business vehicles, so a large fleet operator could see some significant additional costs being incurred.
What has received less attention in the media is that it’s not only compensation that is awarded as a result of a motor accident, but also medical negligence cases, which will have an impact on the NHS, and other awards that result from injuries that may be as a result of accidents that were not related to a motor vehicle. Such claims may be made against the liability insurances held by a business, which in turn could result in increasing costs for both Employers and Public liability insurance. Insurers have to factor these additional costs into their reserves and this in turn is likely to impact on premiums charged.
It’s too early to say how much premiums may rise for businesses, but with the increases recently experienced in insurance premium tax, including an additional 2% in June 2017, the cost of business insurance is likely to continue to be under pressure in the coming months.
If you are in business and are concerned about the potential increases, speak to your insurance broker well in advance of your renewal to discuss what options there may be to minimise the impact of the recent changes. Leaving it too close to your renewal could leave you without any option but to renew at an increased premium.
Taking positive action to improve or reduce the risk you face as a business can help reduce your premiums, but you need to be sure that these are looked at well in advance of your renewal and discuss which measures, if adopted can save you money on your insurance costs.