Insurer's scheme finally gets underway with small, non-unionised businesses

A long-awaited pilot scheme to promote non-adversarial resolutions for low value employers' liability (EL) claims is set to commence a year after initial discussions took place.

Speaking to Insurance Times at the Labour Party Conference in Brighton, Norwich Union (NU) director of claims (public affairs) David Hooker said an NU pilot would begin by the end of October.

He said the first attempt at setting up a fast-track pilot, with Park Cakes Bakeries, had failed because unions had not been able to agree the terms.

Now NU will be piloting a fast-track EL claims scheme with up to four small businesses out of its Glasgow office.

Hooker said that the three or four businesses would be NU policyholders and had been chosen because they were non-unionised. He added that the scheme would last for 12 months instead of the original plan for six months with Park Cakes Bakeries.

"We need to build up a representative number of claims and that will take longer with smaller businesses," he said.

Hooker explained the scheme would involve increased accident reporting by the businesses. "We will look at the accident book once per month and will also be looking at near misses as a way of looking for patterns," he said.

Hooker said businesses were worried about the high level of transparency and demanded that the provision of extra information should not unduly prejudice underwriters.

The scheme also involves notification of potential claims to NU. "Lawyers have been instructed to write a simple letter to us when they have been approached by a client but before the claim, so that we can get working as soon as possible," Hooker said. "All the likely claimant lawyers have been notified to do this," he added.

It is understood that AXA is also thinking about using the scheme in a pilot with some of its small businesses.

The news comes as a welcome boost after last week's announcement that the NHS is planning to recover treatment costs for workplace accident victims. The ABI warned that this could add 5% to EL rates.