Skip to the page Primary Navigation Skip to the page content Skip to page Footer
The OFT closed on 31 March 2014 and this website is no longer being updated. The OFT's work and responsibilities have passed to a number of different bodies. Read more.

Press releases 2002 -

OFT announces liability insurance market investigation

PN 86/02     10 December 2002 

The OFT has launched a fact-finding study into the UK liability insurance market (see note 1). The study will look at public, product, professional and employers' liability insurance.

A number of concerns have been raised over whether the market is working effectively - in particular about large increases in premiums, reported reductions in underwriting capacity and increases in excesses required by insurers. The study has been launched following initial work by the OFT including talks about market developments with the Association of British Insurers and Government departments.

The study will examine why premiums have recently increased. This research will also inform the current debate over how the market is working. The aims of the OFT study are to analyse current and past premiums, to understand why premiums have risen and see what lessons can be learnt from international experience.

The OFT aims to publish a report in spring 2003. Further work may be commissioned in the light of the findings.


1. Liability insurance is insurance against a legal liability which the insured may incur to third parties. It includes policies to protect the insured against:

  • liability to third parties as a consequence of negligent acts in the discharge of professional duties (professional liability)
  • liability to pay damages resulting from claims for accidental death, bodily injury, illness and disease, to employees arising out of, and in the course of, their employment (employers' liability)
  • liabilities to third parties (the public) for accidental death, bodily injury and for any loss of, or damage to, property which is caused by the negligence of the insured or that of his employees in the course of his business (public liability)
  • liability for accidental death, bodily injury, illness, loss or damage caused to third parties by their products or products which they are selling (product liability).

2. The OFT study will be wider ranging than, and complementary to, the review planned by the Department for Work and Pensions of the employer's liability insurance scheme, which was announced in the Chancellor's Pre Budget Report. The OFT's terms of reference have been discussed with the DWP. The OFT will remain in contact with them and other key Government departments throughout the study.

3. The OFT has retained the services of Dr Christopher Parsons of the Cass Business School to undertake some of the detailed research.

4. In this press release the functions of the Director General of Fair Trading (DGFT) are for simplicity described as the functions of  'the OFT'. The Enterprise Act 2002 will replace the office of the DGFT with the OFT, to which will be transferred the DGFT's functions. The relevant provisions of the Enterprise Act are not yet in force.

Back to: Press releases

Public enquiries

08457 22 44 99

Media enquiries

Russell Guthrie
020 7211 8899

Michael Rosen
020 7211 8133

out of hours mobile
(media only)
077 7413 4814

Recently viewed pages

This feature requires Javascript and Cookies to be enabled on your browser

Email alerts

Register for email alerts or amend your existing account details here.