The Government has urged insurers to improve the way they record details of employers’ liability (EL) insurance policies, after new figures showed that thousands of injured workers were blocked from claiming for compensation because they could not trace their former employers’ policies.
The Association of British Insurers (ABI) set up a voluntary Code of Practice in 1999 for tracing EL policies, so that claimants can find their former employer’s insurer if the employer is untraceable, or insolvent. The Code commits insurers to hold records in an accessible format for 60 years. The ABI also set up a tracing service to help claimants search for historic records if they cannot trace the insurer via other routes.
The latest ABI review of the Code of Practice and tracing service, which covered the 14-month period between November 2006 and December 2007, showed that 35 per cent of 11,245 inquiries ended in positive traces. However, data for post-1999 searches showed only a slightly higher success rate of 41 per cent — even though insurers have pledged to record all post-1999 policies, and in a searchable format.
A review body, chaired by the Department for Work and Pensions, has called on the ABI to “influence positive measures within the industry to address this problem”.
Head of technical services at the British Insurance Brokers Association, Peter Staddon, admitted to SHP that there had been issues but said both the ABI and BIBA were trying to improve the system. He said: “One of the problems is that there is no area to list all the relevant companies on the EL certificate. Moreover, brokers would have lists of subsidiary companies but this could be out of date, as the policy-holder could buy and sell companies.”
The ABI has now agreed a Protocol between brokers and insurers, with the aim that relevant data needed to facilitate future services will be provided by brokers and captured by insurers.
But the Association of Personal Injury Lawyers said the current approach was “failing dismally” and urged the Government to set up a central electronic database of insurance records, backed up by a compensation fund of last resort. The group’s president, Amanda Stevens, said: “A compulsory electronic database, similar to that used to record car insurance and TV licences, would automatically record all EL insurance policies, and would be an effective way to ensure workers who become ill in the future are able to receive the help they need.”
