INSURERS MUST TAKE A TOUGHER LINE ON SPURIOUS & BOGUS CLAIMS SAYS RGDATA
An RGDATA members’ survey has revealed that over 60% of retailers have been impacted by claims for trips, slips and minor injuries over the last 24 months. At least 10% of retailers have suffered more than five claims in that period.
During the same period retailers have seen their insurance costs increase significantly. One shop owner reported that his insurance premium has jumped from €65,000 to €106,000 for his five outlets. Another shop owner reported that he had a 20% increase even though the case is still pending.
All respondents confirmed that they are investing heavily in security and the upgrading of CCTV to help tackle bogus and spurious claims. The average upgrade in CCTV is costing €4,500, according to shop owners. Many indicated that these increased costs are putting their business at risk and damaging their potential to recruit additional staff.
Some of the cases reported by retailers highlight the weakness of the insurance industry’s response to claims;
Case 1 – A customer injured himself (cut his thumb) while vandalising a toilet in a shop and claimed against the shop-owner. The shop-owner couldn’t prove the injury was self inflicted – even though two people said they heard unusual noises from the toilet area. The Personal Injuries Board made a recommendation and the customer got a payout of €45K without going to Court. The shop-owner’s insurance went up by 30%.
Case 2 – A customer claimed they had spilt coffee on their hand. The shop-owner agreed she spilt the coffee. The medical report showed that she had a slight redness and no nerve damage. She settled out of court with the insurance company and secured a payout of €6,000 and the solicitor got €6,500. The shopkeeper commented: “While this wasn’t a bogus claim, the level of payout is ridiculous. There is a lack of willingness by the insurance companies to challenge these claims”.
Case 3 – A shop-owner has two large claims in the last fifteen months. One is where the customer slipped, fell and broke her hip. The insurance company paid out €70K and it didn’t go to court. While this was a genuine case, the amount of the payout was a concern.