The 17th edition of the Judicial College Guidelines (JCG), which establishes recommendations for compensation for each type of injury, is due to be published on 5 April.
The previous edition of the JCG was published in April 2022 and the average increase for general damages was 6.56%.1 This year's considerable jump is due to inflation and the cost-of-living crisis, but it is still higher than many legal firms and insurers anticipated.2
Greater control of risks
The JCG are guidelines and not binding on any court when assessing damages, yet in practice they act as a starting point for general injury negotiations. Since 2021, whiplash injuries resulting from road traffic accidents have been exempt from the JCG and now fall under a statutory tariff, which was implemented by part 1 of the Civil Liability Act 2018 and the Whiplash Injury Regulations 2021.3
There are three commercial insurance products that provide protection for personal injuries: employers’ liability, public liability and motor. Employers’ liability (EL) insurance provides indemnity where an employee suffers injury or illness as a direct consequence of their employment. Public liability (PL) insurance provides protection for injury or loss suffered by an individual who enters business premises or interacts with an employee and suffers injury as a result. Any business whose employees drive company vehicles also has a responsibility to purchase motor insurance for its whole fleet.
The rise in personal injury damage compensation amounts has emphasised the importance of risk management to prevent such incidents from happening in the first place. Investing in health and safety measures is crucial for businesses to avoid increasing compensation costs. Such an approach not only shows that a company values its employees, but also helps to minimise its risk of an EL, PL or motor claim, reducing business costs and making its risk profile more appealing to insurers.
Insurance market conditions
The insurance market remains cautious and has a continued focus on risk selection, seeking greater clarity on risk. Claims inflation is an area of concern which may lead to more restrictive policy wordings, removal or limitation of policy extensions. Gallagher understands how to navigate these challenges and present clients in an optimal light, as well as structure your insurance programme in such a way as to maintain appropriate protection. We are here to help you navigate what is a complex environment.
Limits of indemnity may need to increase
With increasing compensation and legal fees, the limit of indemnities in place for public liability policies are key. We advise most businesses to consider higher limits to adequately protect themselves. The specific limit will depend on the size and nature of your business, but we can work closely with you to determine the appropriate level of coverage.
At Gallagher, we understand the importance of having sufficient insurance coverage to mitigate risks and protect your business. Our team of specialists can guide you through the process of selecting suitable limits for your public liability and employers' liability policies, to help ensure that you have the necessary protection in place.
While higher limits may come with an additional premium, the financial impact of a significant claim or liability can far outweigh the cost of increasing your coverage.
Head of Regional Broking - UK Broking & Placement, Karen Greenhalgh, says: “By leveraging our expertise and industry knowledge, we can assist you in effectively managing your risks and securing insurance coverage for your needs. Trust Gallagher to be your partner in mitigating risks and protecting your business.”
Gallagher Client Service Director, UK North Andrew Marvin says, “As a trusted risk partner, Gallagher understands the current landscape of rising general damages and recognises the importance of effectively managing risks for our clients. We have extensive experience in this area and are committed to navigating these challenges.
“It is crucial not to compromise on health and safety or how you present your risk to insurers. We are adept at having meaningful conversations with insurers to ensure that your risks are accurately presented and understood. Our team is dedicated to helping you showcase your risk profile in the most favourable way possible.”
When was the last time you thoroughly reviewed your health and safety policies and documentation? Could you defend your business in the event of a liability claim being brought against you? Through a Claims Defensibility Review, Gallagher can help you reduce your risk exposure and protect your business. Contact the Gallagher Risk Management Team on 0800 612 0034 for more information.
