​What is Before the Event Insurance?

The Civil Liability Act and consequent changes to the Small Claims Track mean that ATE insurance, in its current form, may not be suitable for the majority of lower value claims. Could BTE insurance take its place?

In the first part to this blog, we discussed the lack of understanding around BTE insurance. If the BTE market is to grow, it’s important that the nature and extent of cover purchased under a BTE policy is properly and more widely understood. BTE insurance provides numerous benefits to the policyholder; unlike Damage Based Agreements (DBAs) via Claims Management Companies (CMCs) and Accident Management Companies (AMCs), there’s no deduction from damages recovered under BTE insurance. However, with a premium being paid each year regardless of whether a claim is made, it’s essential that the policy benefits and mechanisms that enable a claim to be made are understood. 

The type of cover offered and the range of additional services available under BTE insurance should make it an attractive product. It’s akin to having direct access to a solicitor working in partnership with your insurer, utilising their resources, to assist you as and when you need their assistance. Although the importance of understanding the terms and conditions affecting the policy is paramount, as they can vary between policies.

Many would describe BTE insurance’s purpose as preserving access to justice for those injured while driving, at work or under health trust care, as a result of negligence. Perhaps it should be more focused on dispute resolution arising from contracts for goods and services or property boundary issues? If properly drafted, understood and used, it can provide certainty for all of the areas above. One thing that’s clear is that it shouldn’t be a commodity product sold solely as add-on cover. The requirements across different policies are far too varied for that. 

For BTE insurance to be able to respond to the needs of those who purchase it, it must be acknowledged that the premium needs to be calculated in a similar way to the more traditional household, motor or business policies. And it must reflect the frequency and severity of the risks insured and how these materially impact the selling price. It shouldn’t be in the fringes or even hidden away as a ‘free’ add-on. For those that have successfully used BTE policies, there’s often no argument when renewal rolls around, it’s always purchased again. 

By purchasing BTE insurance from an industry expert, as well as good cover, you also gain access to top tier law firms who work on your behalf to secure the best possible outcome. This is all covered by your insurer. For a moderate outlay, alongside your home or business policy, you can obtain cover in excess of £100,000, sometimes £250,000 per event, for eventualities that can dramatically impact your life.

The jury is still out, but when the changes to the Small Claims Track begin to bite and law firms are less able to offer contingent fee arrangements for smaller value claims, we could see a move to targeted marketing of BTE products and services. It’s incumbent upon the insurance industry to ensure that the products we develop are relevant, robust and responsive. We must work to raise the profile of BTE insurance so that not only are the features and benefits understood, but also that making a claim under BTE insurance policy is as common and straightforward as it is on a motor or commercial combined policy.