Insurance costs still rising despite reforms, survey indicates

Injured Knee

22 April 2022

Businesses and charities are facing growing bills for liability insurance cover despite recent reforms, according to a new survey from the Alliance for Insurance Reform. 

Released to mark the first anniversary of new judicial guidelines for personal injury awards – which aimed to sharply reduce many court awards – the survey of 954 respondents found that liability insurance premiums have actually increased by 16 per cent.

The cost of premiums is threatening their future, 42 per cent of respondents said, while nine in 10 felt the Government was not doing enough to address the issue.

Liability insurance is cover taken out by businesses, charities, community and voluntary groups, and sports and cultural organisations to meet the cost of any claims for injury or damage to other people’s property on their premises or at events organised by them.

PIAB awards

General damages for minor injuries being awarded by the Personal Injuries Assessment Board (PIAB) have fallen by 47 per cent when loss of earnings and medical bills are excluded, Peter Boland, director of the insurance reform group said. 

The number of claims has also fallen every year since 2016. 

Mr Boland says the new judicial guidelines, combined with the closure of services during Covid-19 lockdowns resulting in no claims, should have seen liability insurance premiums fall. 

However, this has not happened, according to respondents to their survey. 

The guidelines are having an impact on motor premiums, which are down 9 per cent compared with May of last year, Mr Boland said. However, liability insurance premiums have increased by 16 per cent, according to his group’s research.

Almost three-quarters of businesses surveyed reported the addition of new excesses or exclusions on their policies since 2019. More than two-fifths said their businesses’ ability to grow was being impacted, and one in three said they were prevented from providing certain services.

Charities and voluntary organisations are now winding down what they offer or have halted plans to provide additional services, Mr Boland said. 

Insurance Ireland said they strongly supported the new judicial guidelines, but they were concerned by the significantly lower acceptance levels of the awards by claimants. 

“The worry with the lower acceptancy rate is that more cases will go to litigation,” they said in a statement. “It will be essential that the cases are heard expeditiously and that the courts confirm the guidelines in their procedures.”

Duty of care

Eoin McCambridge, managing director of McCambridge’s restaurant and deli in Galway city, said the Government must reform duty-of-care legislation.

“The duty of care is effectively absolute. If someone walks into my shop and anything happens to them, it doesn’t matter what I’ve done, I am responsible,” he said.

He says he was paying €120,000 in premiums for insurance at just one shop at one stage and, over the last decade, he estimates he has paid out almost €800,000 for cover. Now three years without a claim, his annual premium has fallen to €90,000, which he says is still not sustainable. 

“There is no thought of personal responsibility. We have people suing for falling down stairs, but they were on their mobile phones texting, yet the claim succeeds.”

He said businesses are happy to pay for genuine claims and to cover lost earnings and medical fees but argues that general damages of €20,000 or €30,000 for fully recoverable injuries, such as bruising or strained limbs, are “just not affordable”. 

Tracy Sheridan, owner of Kidspace play centres in Rathfarnham and Rathcoole in Dublin, said many small businesses have had to take out loans to pay their premiums. 

“Our insurance is going up despite being closed for the past year and despite having no claims.”

Mr Boland said that, alongside duty of care and PIAB reform, the Government needed to ensure there was more competition in the liability insurance market. 

Insurance Ireland added they recognised the importance of rebalancing the duty of care and strengthening protections in the Occupiers’ Liability Act. 

“A more stable sector, delivered through Government reform, will reduce market volatility and bring more certainty for customers, businesses and insurers alike and support increased competitiveness of the market.”

The Department of Justice was contacted for comment.

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