Nottinghamshire County Council has reported a significant increase in public liability claims over the past year, largely driven by a surge in complaints related to pothole damage on the county’s roads.
The latest update from the Council’s Risk and Insurance team, presented to the Cabinet Member for Finance and Resources, highlights a worrying trend that is placing additional strain on the Council’s resources and pushing insurance premium costs to new highs.
Sharp Increase in Public Liability Claims
The report reveals that public liability claims have risen sharply, with over 1,000 more claims submitted in the 2023/24 financial year compared to the previous year. This increase continues a troubling trend observed since 2022/23, underscoring the growing public dissatisfaction with the state of the county’s highways.
Highway-related risks, particularly those involving vehicle damage from potholes, continue to dominate the claims landscape.
The Council’s ability to defend these claims has weakened, as evidenced by a decrease in the repudiation rate.
For 2023/24, the repudiation rate stands at 73%, a marked drop from the previous year’s rate of 87%. This decrease indicates that a higher proportion of claims are being settled, suggesting that the Council’s defence—often based on proving a reasonable system of inspection and repair—is not holding up as effectively as before.
Increasing Premiums
The increase in claims has had a direct impact on the Council’s insurance costs, with premiums for several key policies rising significantly. The report highlights a 50% average increase in property insurance premiums across the Council’s portfolio, a stark contrast to the more modest increases seen in other areas. Combined Liability insurance rates have risen by 11.5%, while the computer policy has seen an 8% increase.
These rising costs are compounded by additional limitations imposed by the Council’s property insurer. For properties at risk of storm or flood damage, the insurer has increased the excess payable, limited the level of indemnity, and removed these risks from the aggregate stop loss coverage. These changes, effective from 1 May 2024, significantly heighten the financial exposure of the Council in the event of such incidents.
The situation is further complicated for unoccupied properties, where the insurer has imposed stricter terms. Coverage for long-term and short-term unoccupied properties is now subject to full compliance with stringent conditions set by the insurer, adding another layer of complexity to the Council’s risk management efforts.
Continued Decline in Employer Liability Claims
While public liability claims have surged, the number of employer liability claims remains low, continuing a positive trend that began in 2022/23. The report notes that employer liability claims have remained in single figures for the last two financial years, reflecting improved workplace safety and risk management practices within the Council.
Property and Motor Claims
In addition to liability claims, the Council has also faced several property claims in 2024/25.
These include incidents of water escape at Dukeries and Hucknall Young Peoples Centres, theft at Rufford Abbey Country Park, and vandalism at Newark Library. However, all these claims remain within the Council’s agreed excess, suggesting that while such incidents are disruptive, they are not expected to result in significant financial outlays.
Motor claims have also decreased, with 2023/24 recording the lowest number of claims in the last five years. Even during the Covid-19 lockdowns, when travel was restricted, the number of motor claims was higher than in the current period.
Recruitment and Insurance Renewal Challenges
The rising number of claims has led the Council to approve the recruitment of two Claims Handlers and Administrative Assistants on a fixed-term basis. These positions are intended to alleviate the pressures on the Risk and Insurance team, which has been stretched thin due to the increased workload.
The Council’s insurance renewal process for 2024/25 has seen most business classes maintaining or experiencing modest rate increases. However, significant hikes have been noted in specific areas: computer policy rates increased by 8%, combined liability by 11.5%, and property by a staggering 50%. These increases in premiums, alongside the additional coverage restrictions, are expected to have a substantial impact on the Council’s budget.
Strategic Oversight on Abuse Claims
In response to historical abuse claims, particularly those associated with the Independent Inquiry into Child Sexual Abuse (IICSA), the Council established a Strategic Abuse Claims Meeting. This group, which includes senior figures from various departments, has been instrumental in managing the Council’s response. The report highlights a decline in new claims related to historical abuse, suggesting that the Council’s efforts to resolve outstanding cases and prevent new ones are bearing fruit.
