New Compensation Reforms

2 October 2017

New Compensation Reforms

Legislation that will affect your business insurance costs

What is new? 

You may have recently heard about the new Government reforms set to increase compensation awards for members of the public or employees who suffer life changing injuries. These could impact your business insurance premiums, including Employers’ and Public Liability, and Motor Insurance. 

Discount rates or Ogden Tables 

For claimants who are awarded regular compensation payments for the rest of their working life, the Government has reduced the so-called ‘discount rate’ or ‘Ogden Tables’. Until March 2017, this rate was 2.5% and is being reduced to between 0% and 1%. The purpose of this rate is to adequately compensate the investment returns had the individual personally invested the lump sum over a period of time. This is good news for individuals who have been injured because it will increase their lifetime award. A 25 year old person would, for example, receive an increase from £5m to upwards of £8m. However, these reforms will cost insurers an estimated £5bln to £8bln more every year. 

Steps to minimise premium increases 

Did you know that you can reduce your insurance premium by demonstrating to insurers that you are pro-actively reducing your business risks? We can help you by: 

  • Conducting a Fleet or Health & Safety Risk Management audit, where we can benchmark your levels against best practice. We will help you to implement any risk improvements. 
  • Evaluating the costs Vs. benefits of introducing telematic boxes and cameras for cars and commercial vehicles. 
  • Online training – our Virtual Risk Manager online training platform is easy to use and tracks employees’ progress. Staff can complete the modules in their own time. The key benefit for companies is that the audit trail can be used as evidence to defend future liability claims. 
  • Assessing the costs Vs. benefits of increasing your motor policy excess. 
  • Reviewing the adequacy of your insurance Limits, in particular your Liability policies.

If you would like more information, please contact your Sutton Winson team or email

Categories: Commercial Insurance, Risk Management

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