Amsterdam, November 1, 1995

The abolition of liability

United Insurance Press VVP-Magazine

Liability should be abolished. The tide must be turned before it is too late and we must start working on this now if we wish to offer a solvent future to our branch of industry. So what will happen if we go on lounging in our chairs? Well in that case, we will be unable to offer anything to private citizens, businesses, clubs or institutions by the year 2050 – not even a fire policy - since by that time our industry will have gone into global bankruptcy. I believe that the time of waiting until politicians or jurisprudence confront us with new unmanageable circumstances is over.

Hans van Ommen, Managing Director of Lugt Sobbe & Co. seized the opportunity provided by last week’s Euroforum national nonlife insurance congress to forcefully argue the case for a complete change in thinking about liability and insurance. He observes that the recovery of loss has grown out of all proportion and the amounts for which insurers are being held liable are rising. The situation is out of control and hopeless in fact, with the advent of uncertain times for private citizens and for businesses. It is actually becoming too risky for the prospective entrepreneur to undertake anything, while unknown dangers lurk around the corner for insurers as well. Insurers have proved to be liable in the long term for events which they could scarcely have  envisaged in the past. Decades later, asbestos and environmental pollution have emerged as loss factors. Uncertainty rules now, according to Van Ommen, and there is no question of equality of rights, because it is simply a matter of luck whether or not you can hold another party liable. Nor do the rules prescribed by Brussels make things any simpler. As matters stand at present, policy is actually more likely to move in the direction of increasingly wide-ranging and therefore unmanageable possibilities of holding others liable for material loss and personal injury. Van Ommen believes that there is no sense in creating a subsequent outcry that legislation is impossible to implement. Insurers should be involved in the political deliberation process and should think ahead. He appeals to all insurers to exert a stronger influence on policy in order to prevent chaos and uncontrollable growth. Van Ommen’s choice is the way back – the abolition of liability.

According to Van Ommen, private citizens, businesses, the self-employed, clubs or institutions are best able to judge for themselves whether and to what extent they wish to insure against material loss or personal injury. They know the scale of the risk to be insured, after all. They alone have an overall view of what loss requires insurance cover and for what amount. They alone are capable of knowing the potential severity of their financial straits should they or a member of their family suffer physical disability. The insurance industry must respond to the consumer’s own wish to be well insured without having to depend on third parties.