AndyK wrote:Si wrote:but the requirement for 3rd party insurance still involves a cost....if the leaders are indemnified (as they would be in a AG) do we really need riders to have 3rd party insurance...should that not be a personal decision?
Here's how I've had it explained to me in the past. For big claims, insurance companies like to claim off other insurance companies rather than individual people, because they know that other insurance companies have lots of money while individuals may not have.
- Alice leads a ride. During the ride, one rider (Bob) veers sideways suddenly, causing an incident that results in hundreds of thousands of pounds being paid out to third parties by their own insurers.
- The third parties' insurers go looking for someone to pay them back (because that's what insurers do).
- Bob is the obvious target, but he doesn't have any third party insurance. As an individual he doesn't have anywhere near the amount of money they want, even if he sells all his worldly goods. Getting the money out of Bob will be expensive and long-winded.
- So they ignore Bob and go for the first person in the chain of liability who does have insurance: the ride leader. They claim that as leader, Alice should have had better control over the group, should have chosen a different route, should have known Bob was an unsafe rider, whatever.
- Eventually the whole thing gets sorted out between insurers.
- In the short term, though, Alice gets put through a whole lot of stress as the third parties' insurers try to find ways to blame her. Trust me, that's an unpleasant experience even if you do have your own insurers behind you.
- In the long term, the premiums for ride leader insurance go up. Even if Alice's insurers didn't pay up in the end, it will have cost them time and money having to handle the case, and insurers really resent having to work for their money. They will bump up the premium and may even start insisting that all ride participants must be insured.
So if you lead rides or you run a club, it's in your own interests for the participants to have their own third-party cover.
Another aspect to 3rd party insurance is the risk an injured party takes using "No win, No fee" solicitors to pursue a claim against an uninsured person. I discovered this when I was pursuing a case in court against an individual where insurance was not applicable (breach of contract damages). Solicitor was happy to do it on a No Win, No Fee basis but what happens then (once I read the small print) was that their charge rates increase dramatically and, once the case has been won, I am liable for the legal costs though the solicitors will pursue the defendant. But if they can't get the money out of the defendant (e.g. no money or assets) then I would still be liable. This can be relevant where legal costs become significant.
Maybe different companies offer different No Win, No Fee contracts, and it normally is not relevant as they would be pursuing an insurance company (who will have the money for legal costs if they lose).