Insurance expert warns farms of soaring injury claims

Insurance experts have raised concerns over soaring liability claims, lodged by workers and visitors who have suffered injuries on business premises.

A number of cases passing through UK courts are heading for personal injury awards of between £10m and £20m.

The record UK award is close to £37m.

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Nigel Wellings of insurance broker Acres explained larger lump sum awards for injured people requiring lifetime care were driving the rising settlement figures.

Previously, an allowance was made for investment income on top of the lump sum award, Mr Wellings said.

But with interest rates at an historic low, coupled with low investment returns, courts under government guidance have increased the levels of the initial lump sum.

Mr Wellings warned the consequences of receiving a liability claim above typical policy indemnity limits of £10m could be catastrophic for a business.

“Any court award over the indemnity limit can be enforced against personal assets for sole traders or partnerships, or against assets for limited companies.”

Claims on farms could arise from injuries to walkers on public rights of way, damage from falling trees or illness due to contaminated produce, Mr Wellings suggested.

“We commonly see farms with between 10 to 100-plus employees with £10m Employers’ Liability cover, which is woefully inadequate.”

To safeguard businesses, he recommended farmers and growers should speak to their insurance advisers for a risk review.

Factors such as closeness to main roads or railway lines, vicinity of urban areas, public access to the farm, trees bordering roads, or whether the business is supplying food products should all be investigated. 

With a full and thorough review, the farm business can safeguard against potential eventualities with more appropriate levels of Public and Product Liability and Employers’ Liability cover.