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Recent Court Settlements May Mean Your Liability Cover is Inadequate

The higher risk activities undertaken by the construction sector have the potential for substantial losses.

The escalating levels of recent personal injury compensation settlements should prompt prudent businesses to consider if their employers’ and public liability indemnity limits still remain sufficient.

Some Recent Court Settlements

In 2010 the Guernsey Court of Appeal awarded £14M to a cyclist who had been left severely brain damaged and needing 24 hour care.

An earlier case involved a payment of £11.15M arising from an accident involving a 22 year old male from Walsall who had sustained injuries in 2006. This settlement included a lump sum of £4.25M in addition to annual payments of £235,000 - part of this comprised the costs of building a suitable house for the claimant opposite his parents home to enable him to be cared for.

In 2009 a teenage girl was paralysed in a car crash in which her mother was killed and is to receive some £23M in compensation which is thought to be a new record for damages. The victim sustained spinal injuries at the very highest level of severity, which left her with no use of her legs and little function in her arms.

Do these Court Settlements Affect Me?

Each of these examples involved injury to an individual. The potential is further increased in relation to groups of people or damage to property, for example a serious claim incident involving a number of employees will almost certainly exceed the standard indemnity level provided by Insurers.

The higher risk activities undertaken by the construction sector have the potential for substantial losses. Various standard building contract wordings are used and a common misconception is that the contractors’ liability is limited to the amount of cover specified therein. In fact, the JCT forms of Contract make it very clear that this figure is the minimum sum required and the contractor’s liability is thus unlimited

MPW Insurance Brokers Limited have always maintained that clients should select substantial indemnity limits. Should a claim exceed the limit under the policy, the business will have no cover for the balance but the assets of the company or its directors and owners will be under threat for the shortfall.

MPW Insurance Brokers Ltd, 7/8 Tolherst Court, Turkey Mill, Ashford Road, Maidstone, ME14 5SF

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