The Ogden Rate Discount Change – What does it mean for your business?
The Ogden Rate discount change came into effect on the 20th March 2017 and applies directly to all current claims that are in progress which is why it is vital to understand the impact this could have with your current insurance arrangements. The Ogden rate change affects personal injury settlement pay outs in terms of the amounts awarded.
Prior to the Change, For Example:
Geoff was injured in a Car Accident and currently earns £30,000 per year, the annual cost of care for Geoff is £85,000.
Under the previous Ogden rate of 2.5% (the range does differ from -2 to 3% depending on the losses and retirement age and the individual case concerned) Geoff would receive the following.
£685,200 for loss of earnings from the salary mentioned above
£2,516,000 for the cost of Geoff’s care
Total Settlement figure of: £3,201,200
Total Settlement Cost following the Ogden Rate change to -0.75%
£1,161,300 for loss of earnings from the salary mentioned above
£6,071,550 for the cost of Geoff’s care
Total Settlement figure of: £7,232,850
Employers and Public Liability limits need to be assessed considering the change due to the very likely risk that the settlement could be above the amount you are insured for, leaving your business and staff in financial jeopardy.