Opinion: Claim culture may see farm insurance premiums rise

The insurance industry is in one almighty pickle. The troubles have been transported from America where the claims industry has huge power and no one appears to take responsibility for any personal action.

The situation comes about as follows. A person injures themselves. They could be an employee, visitor or trespasser. They hurt themselves and rush off to A&E.

In the casualty department are leaflets telling them to claim for their injuries/trauma/days off.

When they arrive home, they receive a phone call telling them to do the same.

They speak to one of the ambulance-chasing (sorry, no win, no fee) firms of solicitors that take up the case.

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I have spoken to many company owners who have been in this situation and, despite having expensive professionally written risk assessments and daily physical checks of premises and equipment, in their experience, it is highly unlikely that a claim will be contested by an insurer.

As I understand it, the government has recently capped the amount that a prosecuting solicitor can earn at £900 if the defending person/company agrees fault within a tight time frame.

The defending insurance company is liable for the defending lawyers fees whether the case is won or lost. This, obviously, they want to mitigate.

In most cases, the cost of defending a case is astronomical, especially if the case goes to court.

Understandably, the insurance companies wish to avoid this cost and therefore agree to a payout.

The trouble is that every man jack realises that, by claiming, they will almost certainly get a payout of anywhere up to £25,000 just by applying.

What they don’t realise is that the cost of their claim is partially passed on to the company in terms of an increased premium.

It also means that some companies, where there has been a series of petty claims, are finding it difficult to get insurance cover.

“The trouble is that every man jack realises that, by claiming, they will almost certainly get a payout of anywhere up to £25,000 just by applying”

When this happens, and it will, especially in the “higher risk” industries such as tourism, farming, construction and anywhere involving children, an otherwise thriving businesses will have to shut down.

As one person said to me: “The current generation of adults, more often than not, take the view that an accident is an accident unless the company has been incredibly negligent.” She is convinced that the younger generation believe that an accident is always someone else’s fault.

How do we make this madness stop? Change the rules regarding no-win-no-fee lawyers.

Of course lawyers should be able to take on whatever cases they choose, but if they lose, they lose.No fees from their clients and no claiming fees from the “winning” insurance company.

This ensures that they will only take on the cases that have a chance of winning – and the insurance company has a fair chance of winning, too.

I realise that most insurance companies, and the people representing them on the ground, do not want to raise premiums as they would like to retain clients, but if the current system prevails, many businesses are at risk. The government and the insurance companies need to take action now.

Perhaps a large insurance policy also ought to be part of the “start university” package. My youngest has just completed her freshers’ fortnight at Plymouth.

She has sent us photos of beaches, nightclub revelries and one of how thin she’s got having to cater for herself and walk up big hills to university. She also lives on the fourth floor and the lift is too slow.

She has joined all the water sports clubs. I did question why she had joined the kayaking club, having never shown interest in any type of boat that has to be propelled with personal physical effort. She explained, with good reason I thought, that the guy selling the virtues of the club at freshers’ fair had been “hot”. What a fabulous way to encourage membership.

The club set off to a large lake and indulged in kayaking, “sup boarding” (standing on a paddle board), raft building and socialising in a big communal tent.

She explained what they got up to. I’m so glad she waited until she got home before telling me this; my heart wouldn’t have taken it otherwise.

She returned after a wild weekend spent in either a wetsuit or a damp tent, with an horrendous cold. So poorly that she’s had to miss the first day of her geology field trip.

I have had to explain that university involves playing hard, but she also needs to work hard. So that’s sorted… not.

Should she have experienced any type of accident that really was an accident, you can be assured that she would not have been filing a claim as soon as she got home.

If claims continue to increase at the current pace, fun-giving activity businesses could have to close within months. This should not be allowed to happen.

Sally Jackson and husband Andrew farm 364ha just outside Scunthorpe in north Lincolnshire. They have a farm shop, The Pink Pig Farm (a former winner in the diversification category of the Farmers Weekly Awards), with a 90-seater café and farm trail. Sally is chairman of the Farmers’ Retail and Markets Association (Farma).

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