Independent Insurance wiped employers' liability (EL) claims notifications off its books after six months, although the legal limitation for such claims is at least three years.

Insurance Times has uncovered the first hard evidence of claims mishandling within the company, about which there has been widespread speculation.

Brokers who notified Independent of potential EL claims received letters exactly six months after the date of notification, which said Independent had closed the file, with no cost recorded.

Crossley Morris & Co principal Ian Morris said he had placed a lot of EL business with Independent, but only noticed the trend in closure of notifications early this year.

“EL claims must be kept open for at least three years and a reserve put against them, because it could be just short of three years before the injured person decided to make a claim,” he said.

Morris said removing the claims from the books before the limitation period was up created a false picture of the amount of outstanding claims held by the company.

Legal experts at DAS confirmed the limitation period for personal injury, which made up the greatest part

of EL claims, was six years in cases where negligence was alleged and three years in other cases.

Leading EL provider Iron Trades Insurance Company confirmed it kept notifications “with significant potential” on its books, with reserves allocated on a full-liability basis, for the limitation period.

An Iron Trades spokeswoman said the company also retained notifications that were unlikely to lead to claims for the limitation period.

“Where the limitation period is extended, our archiving is tailored to match,” she said.


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