How to avoid public liability claims
- A complex range of factors is affecting local authorities’ public liability premiums
- These factors include a growing number of large claims from social services and highways departments
- We explain the actions we are taking to address these challenges and discuss the risk management support we can offer to help reduce the risk of large claims occurring
Continuing budgetary pressures influence almost every area of an organisation and can indirectly have an impact on insurance as the ability to defend claims may become compromised.
Proactive risk identification is key, but so too is your response to that risk and subsequent evidence of this response.” Marie Williams, Safeguarding Risk Consultant, Zurich
In recent years, we have seen an increase in the volume of large claims, particularly relating to highways and social services.
In relation to highways, this year’s Annual Local Authority Road Maintenance (ALARM) Survey revealed an extra £11.8bn is required to bring roads back up to scratch. Against this background, we have seen a rise in significant personal injury claims, often involving cyclists or motorcyclists, with reserves and estimated costs sometimes running into many millions of pounds.
The budgetary challenge affecting highways functions could be compounded by the introduction of a new code of practice, “Well-managed Highway Infrastructure”. This will require local authorities to back up all decisions and strategies regarding asset management, maintenance programmes and inspection frequency with clear evidence of the assessment of the associated risks.
Challenges affecting social services
Social services is another area seeing a rise in substantial injury claims, relating both to child protection and the safeguarding of adults.
Advances in medical treatment and emergency care, alongside improved facilities for assisted living, have led to increased life expectancy and an ageing population. This has led to a growing number of Periodic Payment Orders for complex injury claims, increasing the costs for insurers when paying claims.
What can local authorities do to avoid large claims?
While most local authorities have adopted good risk management policies, procedures and practices, we are keen to assist this process further to help ensure that everything that is reasonably practicable is being done to avoid large claims.
The key to defending claims is being able to demonstrate evidence of proactive measures to identify vulnerabilities and risks. This usually involves establishing a clearly evidenced, risk-based system of inspections, as well as an appropriate mechanism to remedy issues identified.
Proactive risk identification can often remove potential hazards or vulnerabilities and reduce the likelihood of a loss occurring in the first place.
Steve Thomas, Senior Risk Consultant, Zurich Risk Engineering Casualty Practice, says: “In relation to highways, what is often key to repudiating a claim is being able to provide evidence that an inspection took place and that there was actually nothing wrong, or the alleged defect complained of was not actually dangerous.
“The rapid advances in technology can assist with this, with the ability to photograph hazards and upload to record systems often proving invaluable in disproving the assertions of a claimant.”
In relation to safeguarding, Marie Williams, Safeguarding Risk Consultant, Zurich, says: “Proactive risk identification is key, but so too is your response to that risk and subsequent evidence of this response. At all times you need to maintain evidence of ‘defensible decision making’ and remember that, due to the very nature of safeguarding, it is imperative that you strike a balance between being too risk averse and being too risky.”
How we can help
Our Risk Engineering Casualty Practice can support you in developing the practical systems, processes and evidence that will assist with risk mitigation and improve claims defensibility.
As part of a review of our public liability portfolio, we have developed and piloted a risk management planning protocol, to establish the priority of risks you face so we can provide a tailored solution.
We are also working on specific projects relating to highways and safeguarding.
We have a dedicated Safeguarding Risk Consultant to guide our work in supporting local authorities to reduce the number of safeguarding claims. We have conducted a full review of our current approach to local authority safeguarding risks, and our underwriting and claims teams will be involved in developing a new approach that will help you to ensure your strategic plans are translated into operational actions.
We will also be carrying out mandatory ‘critical friend’ reviews of highways customers, focusing on improving claims defensibility, how inspections and repairs are recorded, and the way evidence is provided for strategic decision-making.