The family that owns the riding stables is faced with a huge increase in their PLI and thinks this might threaten the future of their business. They pin the rise in premiums on the ‘blame and claim’ culture.At the recent ABI Health Conference, Lord Philip Hunt, a Department for Work and Pensions minister, highlighted the importance of regulating claims companies. But he said despite the increasing number of claims companies, there is no evidence of a compensation culture problem. Brokers faced with the burden of PII might not agree. But Lord Hunt added it is important that claims are addressed now before a compensation culture develops. At the moment claims management companies are not regulated so there is no come back (apart from the normal laws) against the type of claims they are encouraging people to make. Neither is there regulation of their advertising. An example of targeting consumers can be found in the endowment issue that is still raging. Some insurers are adopting novel tactics to try to discourage the use of these companies. One insurer refused to pay the proceeds from endowment compensation claims to the claims company – it issued the compensation directly to the client. There is no reason other insurers can’t follow this lead though ABI guidance notes suggest the insurer reminds the claimant of their need to pay their claims company which submitted their compensation claim. The ABI has joined forces with AIFA to find a way of discouraging claims companies, reminding consumers that there is a way to get redress from the insurance industry direct if they have a complaint. This is free and if they do not get satisfaction from the company they can refer the case, again free of charge, to the Financial Ombudsman Service. The government intends to regulate claims companies through its Compensation Bill. The bill isn’t about stopping people claiming for genuine reasons. It is about is ensuring there is a robust system for valid claims and that the frivolous claims are avoided. People must be clear they have a right to compensation if the firm they are claiming against has been negligent. But if the incident could have been avoided by taking reasonable care, this should not result in a claim. We must remember we are human and mistakes happen. Knowing we will be able to avoid an influx of frivolous claims – and have the law behind us in doing this – is reassuring, not only for the future of our businesses but also the cost of the insurance we need to run these businesses.Nick Kirwan is protection marketing director at Scottish Widows
Lovers of Radio 4\'s The Archers will not be surprised to hear its true to life story lines included the rising cost of public liability insurance last month.