This surge in premiums is largely attributed to a worsening claims experience, particularly in relation to bodily injury claims. The average size of finalised bodily injury claims has been growing by 5.5% annually since 2013. Notably, work injury claims have doubled in size compared to other bodily injury claims, contributing significantly to the overall increase in claims costs.
In response to these rising costs, many businesses are opting for policies with higher deductibles, effectively assuming more risk themselves to manage premium expenses. While this strategy may offer short-term financial relief, it also exposes businesses to greater financial vulnerability in the event of a claim.
The construction, retail trade, and mining industries are among those most affected by these trends. For small and medium-sized enterprises (SMEs), the escalating costs of public liability insurance can be particularly challenging, potentially impacting their ability to operate sustainably.
To navigate this challenging landscape, businesses are encouraged to:
- Conduct thorough risk assessments to identify and mitigate potential liabilities.
- Implement robust safety and compliance programs to reduce the likelihood of claims.
- Engage with insurance brokers to explore policy options that balance coverage and cost.
- Stay informed about legislative developments that may impact insurance requirements and costs.
By proactively managing risks and staying abreast of industry developments, businesses can better position themselves to handle the financial implications of rising public liability insurance premiums.
