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Businesses Face a New Under-Insurance Risk

July 2017

Recent changes to the Ogden Discount Rate will see personal injury claimants receiving larger lump sums. As a result, businesses need to review their current indemnity limits on Public Liability cover, or risk being under-insured.

Essentially, the Ogden Discount Rate is a calculation used by insurance companies to determine how much to pay-out to those who have suffered life-changing injuries. The change means the rate is being decreased from 2.5% to -0.75%, meaning the pay-out will be much higher, costing the insurance industry millions of pounds.

It is also believed that insurance premiums are likely to rise. While claimants should get a fair settlement of claims following an injury, the rate change has significant implications in terms of cost and affordability of insurance. It applies to all claims settled on or after 20 March 2017 and will have an impact on the cost of future settled claims, which will be reflected in future casualty and motor premiums.

As an insurance broker, we cannot urge our clients strongly enough to look at their limits of indemnity and see if there is a shortfall. We also strongly recommend implementing robust risk management.

If you are unsure about the effects of the new Ogden Discount Rate and how it may affect you, talk to us today so we can ascertain whether you need to increase indemnity limits on your liability cover.


020 8450 5336

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