Public Liability - How Expensive Is Your Insurance?

ironclaw

In light of recent developments in the leisure industry insurance game:

https://www.thejournal.ie/leisure-insurance-government-bouncy-castle-leisure-4734369-Jul2019/

I wanted to share some of the horror stories I've been hearing from industry:

- Most venues are now out of insurance, or close to it.

- Plenty can't get insurance, at all.

- About 100 venues have closed up or severely cut back their activities in the past year as a result of this and this trend continues.

- One venue's insurance has increased over 5 fold to €42kEUR, all upfront, for the year.

- Failte Ireland and various Ministers have done absolutely nothing to curtail this, and it's having a huge impact not only on tourism for 2020 and beyond, but local employment as well.

Anyone here in a similar boat?

pedroeibar1

There already are ‘lobby’ groups supposedly tackling this. TBH Ironclaw, that is a rubbish article and acceptance of an even more stupid response from the government spokesman. Their hands are not tied, as anyone with any little knowledge of what the causes of the costs are.

Why would anyone expect Bord Failte to do anything? Their job is to bring in tourists. It is directly and indirectly dependent on the State for funding. It is not going to bite the hand that feeds it, nor are its directors going to say anything critical of any government. (All directors appointed to semi-state companies need final approval from the relevant minister, so guess who gets the jobs?!!)

Sadly the pathetically poor knowledge level and laziness of journalists writing on insurance in this country leads to misconception and lack of understanding of what is happening and what needs to be done. There are two main issues, regulation and cost.

Regulation
The ball is firmly in the court of the Min. for Justice. He must bring appropriate legislation and ensure it is passed by the Oireachtas and placed on our statute books. That involves substantial input from the Law Reform Commission and those in the Four Goldmines. The LRC is working on a report on civil liability costs, but its wheels, like those of all state reform bodies, turn extremely slowly. For example the Company Law Review Group started work on the recent Companies Act in year 2000. That’s fifteen years to get it done/dusted, and almost a decade too late to set out a legal framework to prosecute those who precipitated a financial crisis. Judges make rulings based on legislation/case law, but have some freedom where there is a void, so there always will be ‘exceptions’. There also is a very sensitive line of separation between an independent judiciary and government. Judges have always been reticent about being seen to 'legislate' - that is not their role. The laws must be enacted.

Cost
The cost of claims is made up of several factors – mainly damages and costs. Last year a Dept. of Finance Report showed third party injury costs per claim are £11,000-£13,000 in the UK compared to €40,000-€60,000 in Ireland. (I realise this is motor, but it is a significantly relevant finding.) That’s a multiple of four. Legal fees are included in those costs but they also are considerably higher in Ireland often because the courts process is dragged on for much longer.

Business costs have risen hugely in the insurance industry itself as a result of regulatory change – the new Solvency II regulations (For EU and adopted by others) for example have cost UK insurers more than £200 million to implement and ongoing costs of compliance, while not as high, will be considerable. Irish branches will have to pay their contribution and Irish insurers will have to bear similar, regardless of their size (premium income). Add to that the CBI’s demand that the financial services sector fully fund its running costs – already the sector is paying for two thirds of these costs and, as approved by Pascal O’Donoghue last June, it must be 100% by 2024. Basically he’s given the CBI a blank cheque payable by the FS industry. Like all operating costs, the total of these will be passed on to the insured.
The wide-ranging rules of GDPR (and a wider-ranging interpretation of them) have ruled out pooling of information by insurers to minimise fraud risk.

Taking all that into consideration it doesn’t take much to figure out why insurance is more expensive in Ireland. People need to lobby their local politians first, refuse to accept the 'that is not my area' response and push for action to get appropriate legislation in place. Then if the insurers don’t reduce premiums, tackle them. But the acceptance of stupid, misleading articles, allowing lawyers to blame insurers and vice-a-versa, and not questioning crap from politicos who blame everyone other than themselves is neither helpful not the way to get the problem solved.