Ogden ruling - do we need to increase Public Liability cover?

Savvy_Sue · 16 June 2018 at 1:43AM

DH is trustee for a small voluntary organisation. Their insurance broker has sent a leaflet through suggesting that the government's change to the Ogden rate leaves organisations at risk of being under-insured.

They say the previous 'standard' values of £1, £2 or £5 million cover for Public Liability are no longer adequate.

Does this sound reasonable, or is it scaremongering? I work for a medium charity myself, and it's not crossed my radar at all.

da_rule · 16 June 2018 at 6:45PM

As it seems you know, the new Ogden rate of -0.75% came in during March 2017. The previous rate (since 2001) was 2.5%.

The following worked example is a good illustration of the impact of this change"

Based on the Ogden rate of 2.5%, a 21 year old male who has been injured and is looking at a future of nursing care and loss of earnings totalling £9,072,028, with the new rate of -0.75% the nursing care and loss of earnings increases to £20,023,103. As you can see from this example, the change in the Ogden discount rate from +2.5% to -0.75% reflects a significant increase in the total settlement of a claim.

Therefore the old £10million cover would have been sufficient under the old rate, whereas it would still leave a gap of more than £10million under the new rate.

There was rumblings at the tail end of last year that the rate would increase so lower the payouts again, but I cannot see that this ever actually materialised.

Savvy_Sue · 16 June 2018 at 7:30PM

Thanks. So, not scaremongering, it is something they need to factor in.

Ogden ruling - do we need to increase Public Liability cover?

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