Accident insurance in United Kingdom
Accident insurance in the Business Encyclopaedia and Legal Adviser
Based on the Business Encyclopaedia and Legal Adviser , by W.S.M. Knight, Barrister –at – Law.
The numerous casualties to which the life of man is liable are subjects of daily occurrence and observance—there is scarcely an individual who cannot refer within the sphere of his own family or acquaintance to instances of sudden or accidental death; and few who cannot look back to their own escape from danger. To indemnify against the consequences of such a calamity, whether happening in the pursuit of business or pleasure, is the object of accident insurance. Injuries incurred in actual warfare do not properly come within its ordinary scope, but they have now, for some time, been the subject of special insurance. The system of accident insurance may be said to owe its origin, in a great measure, to the development of railway travelling. At any rate the year 1845, memorable in the history of railway enterprise, is equally memorable in the history of insurance. Between that year and 1850, thirteen accident insurance offices were projected, two of which were completely registered, in the United Kingdom. In consequence of so many of the offices being unable to make their business pay upon the rates of premiums then common, and in consequence of the many fraudulent attempts made by the insured, culminating in the disastrous year of 1857, when over £14,000 was in dispute in cases where fraud was undoubted, that year became the starting-point of modern methods in accident insurance. Then was the attempt begun to be made to classify the risks; to adapt the premiums so that they should be remunerative for each class of risk; to settle policies that would strictly define the risks covered; and to arrange proposals so that the possibility of fraud and misrepresentation might be minimized.
And from that time, the accident insurance business developed and strengthen. The increase of machinery in manufactures, the greater concentration of population in towns with its increasing traffic, the English Employers’ Liability Act of 1880, the value of insurance as an advertisement, the development of motor traction, and finally the Workmen’s Compensation Acts in Britain, have all tended to make accident insurance a persistent factor in modern life. And so today, as a final result of those efforts to make accident insurance a profitable commercial undertaking (including, it must be admitted, an undoubted combination of certain companies to maintain the uniformity of premium rates), British Accident Insurance stands, as a whole, in a very strong position. In 1901, the total funds and paid-up capital together provided £10,701,567 available for the protection of the insured. In addition to these reserves there are many millions of uncalled capital at command should necessity for them arise. The premium income of 1900 showed an increase of about .£200,000 over that of the previous year, but the claims showed an increase of somewhat more. And within certain limits such seems the inevitable condition of things; or it is a curious fact that claims increase proportionately to the duration of the risk. During 1908, owing to the great competition on the part of the non-tariff offices, the rates for this class of insurance were considerably decreased, but in 1911, owing to figures and amalgamations, the rates were raised. Nor are the rates likely to be decreased, for both accidents and malingering are certainly on the increase.
Disputes between the insured and the companies, comparatively, were very rarely presented before the Courts. This is the result of the arbitration clause usually inserted in the policy, whereby a settlement of disputed claims is arrived at without the publicity of legal procedure. Whether this is an advantage to the insured is an open question.
As in other forms of insurance, the contract of accident insurance is called a policy; the law in respect therefore being based upon the same principles as that of the other classes of insurance. The usual form of policy entitles the insured or his representatives to certain fixed payments in case he sustains any bodily injury, “caused by violent, accidental, external, and visible means,” and resulting in death or disablement within three months of the accident. ” Disablement” means that the assured is prevented, wholly or partially, from attending to his ordinary business. It is either permanent or temporary, total or partial; the policy, as a rule, clearly defining these terms. The contract is not, strictly speaking, one of indemnity; for the agreed compensation does not necessarily bear any relation to the income or earnings of the assured. Such compensation, however, is always limited in length of time to the period of the disablement; provided, as a rule, that twenty-six weeks shall be the longest period for compensation in respect of any one accident. The policy of insurance may be taken out for any stated period agreed upon; or it may be limited to a certain journey or class of risk. The usual case, however, is for the policy to run for a year; it then being renewable, but at the company’s option, year by year.