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In the current unprecedented circumstances, we would like to provide an update regarding our service to you.

Our aim as your broker is to continue to deliver the highest standards of service possible. We remain open for business.

We are committed to supporting you in these difficult times. If you have any concerns regarding your insurance arrangements, we are still here for you.

You can get hold of us on the usual phone numbers and via email as normal. Our opening hours also remain unchanged.

While we don’t anticipate any service disruptions, we ask you to be patient should you have any issues getting hold of us. Rest assured we will continue to operate our business as usual. We will respond to all enquiries as quickly as possible.

Also, in line with government guidance, we are conducting all meetings with clients via teleconference or video conferencing facilities wherever possible. This minimises the risk of unnecessary social contact. We remain available to speak to you.

Please contact us if you need to. We hope you stay safe and healthy. We look forward to continuing to support you, now and in the future.
 
Kind regards,

Jeremy Clifford

Director
CLA Risk Solutions
 
With effect from 5th August 2019, the Ogden discount rate changed from -0.75% to -0.25%.

Why will this lead to higher premiums? To understand this, you will need a bit of back-history.
 

What is the Ogden discount rate and how does it work?

Road-accident-fire-engin-and-ambulanceNamed after Sir Michael Ogden QC, who was the chairman of the working party that established the Ogden tables.

They are used to adjust the compensation a claimant will receive after sustaining a life-changing insured injury.

There are a variety of tables that can be used to calculate the discount rate such as; how to calculate life expectancy, a multiplier for lifetime loss, the value of a single loss in the future and a multiplier for loss over a period.

For example, if you are involved in a life-changing accident that you are covered for under your insurance policy, you will be entitled to compensation to cover hospital treatment, care and loss of earnings.

This figure is then reduced by the discount rate to allow for the likely income achieved after investing the lump sum. Using the tables, a figure can be established to show how much a compensation lump sum is adjusted after calculating the expected return on investment. The higher the Ogden discount rate, the lower the payout from insurers.

The rate was set at 2.5% and had remained at that rate since 2001. Then in 2017 the rate was reviewed and changed to -0.75%. The large decrease was justified because of the lower yields achieved on investments during the period. This resulted in increases in insurance premiums for customers buying insurance but a better outcome for claimants who would not have to take risks with their invested compensation funds.
 

Why will this affect my insurance premiums?

Many insurance providers believe that even at the new level of -0.25%, claimants are being over-compensated and think a further review will be necessary, adding more turmoil to the market. The below 0% figure continues to assume a low-risk investment return.

Most insurance providers were expecting the new rate to be set between 0 and 1% and made assessments based on this figure. Though under the new rate, they will have to pay out less to claimants, they are warning that this could still lead to higher insurance premiums in future because keeping the rate below 0% maintains high claims settlements.
 

Winners and losers

It looks like we will all be paying more for our motor and liability insurance in future with premiums already rising since the announcement was made.

However, personal injury lawyers have welcomed the restraint in increasing the Ogden rates stating that claimants who have suffered life-changing injuries will be able to maintain a steady income from their lump sum from low-risk investments and avoid the risk of short term swings and losses from riskier investments.

CLA Risk Solutions, with access to a range of insurance providers, will be able to research the market to find you the most cost-effective insurance policy for your needs. As your local insurance broker based in Sutton Coldfield and Stafford, we cover the whole of the West Midlands and can offer a range of business, personal and liability insurance.

Call 0121 320 4600 to discuss your requirements.
Running an enterprise of any kind involves an element of risk.

Risk_Management_represented_by_car_console_dialTypical risks include:
  • Health and safety.
  • Environmental risks associated with business operations or external weather or economic conditions.
  • Financial risks.
  • Regulatory risks.
  • Security including buildings and cyber risk.
  • Fire, flood and other business interruption risks.
Your insurance policy can cover these risks.

The key is to identify the risks associated with your business, assess the likelihood of the risk occurring and estimate how much the incident will cost your business. Then decide if the risk can be limited and how much of the risk you need to cover for your business to survive an incident.

Risk management
Establishing a risk management plan and undertaking a review of the risks in all areas of your business will help you to identify and prioritise risks and put in place a process to mitigate them.

This will demonstrate that you have a system in place to minimise the impact of an insured loss and will provide your insurers with valuable information they can use when calculating your premium. It may also help to speed up your claim after an incident, for example: One of your employees is making a claim following an accident. You suspect that you were not negligent and the claim is fraudulent.

When investigating your claim, insurers will have to decide:
  • Whether the claim meets the policy terms and conditions.
  • Can a robust defence be provided by way of documentary evidence or systems?
  • Is it worth defending? Defence costs can sometimes outweigh damages awarded.
An effective risk management plan and proper procedures can often prevent an accident or fraudulent claim. This is always preferable and more cost effective than defending the claim.

Risk management support
Insurance brokers are in an ideal position to offer support and advice on best practice and claim statistics to help you to formulate a risk management plan, for example:

Key causes of accidents/claims (Insurance company data)
  • Slips and trips 27%.
  • Manual handling 20%.
  • Struck by/contact with object 17%.
By working with your insurance broker, you can discover how to mitigate some of your business risks to ensure you are minimising incidents and maintaining adequate insurance cover if you need to make a claim.

Call CLA (Risk Solutions) Ltd on 0121 321 4600 to discuss your risk management requirements.
Many business owners are not aware of business interruption (BI) insurance or understand the benefits it provides. It is therefore easily missed when insuring your business against risks. If you use an insurance broker, they will usually assess whether this additional cover is needed for your business and offer it as an addition to your buildings and contents policy. However, if you use one of the online comparison websites, it would be natural to think your buildings and contents insurance would cover most eventualities.

Business interruption insurance is not necessary for all businesses but is crucial for some; for example, if you have equipment and machinery that is difficult to replace or carry a lot of stock that will take time to re-manufacture, this type of insurance cover could mean the difference between business survival and failure.

How does business interruption insurance work?
Cover is available as an add on to your buildings and contents insurance. If an insured risk affects the running of your business, or causes extensive damage to the buildings, machinery, equipment or stock, resulting in your business having to shut down for a period, the insurance will cover the financial losses, for example:
  • Loss of revenue due to closure.
  • Increased costs of working such as temporary relocation or equipment hire.
  • Additional employee costs for overtime or hiring temporary employees.
  • Temporary storage costs and removal fees.
  • Safety and security at temporary accommodation.
  • Loss of income from rent.
  • Long term effect of loss of sales and customers.
If your business is not in a position to recover quickly from a major incident, then business interruption insurance fills the gap.

For example:
Business_Interuption_Insurance_2A fire engulfs a large section of your premises and damages equipment and stock. Your buildings and contents insurance will cover the repairs and replacement of equipment and stock, but this may take months to complete.

Flooding or water damage repairs can take months to make the building habitable again and unless you can easily relocate and hire machinery and equipment, your business could fail during the time it takes to start trading again.

Each business must assess their own level of risk and whether a major incident would be manageable without the financial support that business interruption insurance provides.

This is where an insurance broker can help. Talk to CLA (Risk Solutions), your local insurance broker in Sutton Coldfield to get a quote for how much it would cost to add business interruption to your buildings and contents insurance. Call 0121 321 4600

 
 
UK citizens are being bombarded with nuisance calls by unscrupulous companies chasing no win no fee claims for injury from motoring accidents, holiday illnesses or injury at work.

Their arguments are sometimes so convincing that usually law-abiding citizens are tempted into making an insurance claim for an injury or illness that was less serious or never sustained. Let’s not fool ourselves; to make such a claim is fraud and the courts are starting to clamp down on this behaviour.

Insurance_fraudA recent case involved a couple who claimed to have sustained serious injuries when their Volkswagen Bora collided with a bus run by transport company Abellio.

Following subsequent CCTV footage of the crash, it was found that the bus was not travelling at more than 5mph and a medical expert argued that the crash could not have caused the injuries they were claiming for.

The bus company took the couple to the high court for lying about their injuries and the result was a fine of £6,000 court costs and prison sentences for the couple.

The government is also concerned about the increase in claims, particularly the soft tissue injury (whiplash) claims. Under the new laws introduced in 2017, measures have been implemented that will reduce the number of claims and limit financial compensation. This will help reduce the insurance premiums for all motorists.

Insurance fraud
Fraudulent claims for insured loss fall into many categories; these are some of the most common:

1.Motor insurance fraud
Deliberate harsh breaking to induce an accident, often carried out by organised criminals to obtain vehicle damage and personal injury compensation. Sometimes multiple non-existent passengers are claimed to have been injured.

2.Application fraud
Not providing all the facts about claims history or penalty points when filling in an insurance form to obtain a reduction in premium.

3.Commercial liability fraud
Every business in the UK must have Employee Liability Insurance unless they are a sole trader. Fraud can be committed by the insured company and third parties. Claiming for a fictitious injury or exaggerating an injury or loss are the most common.

Reducing insurance fraud
The insurance industry invests £200 million each year to identify fraud*.

Insurance fraud is a serious crime which can have a major impact on perpetrators such as difficulty obtaining future insurance, increased premiums, damage to employment prospects and possible criminal conviction.

Insurers are committed to combating insurance fraud to keep insurance premiums down for honest policyholders.

If you are not sure what to fill in on your insurance form or what you can legitimately claim for after an incident, talk to your insurance broker who will always be able to provide you with the right advice.

*source https://www.abi.org.uk/products-and-issues/topics-and-issues/fraud/