The ECA has responded to the Government's review of the UK liability insurance market with a call for solutions rather than a mere outline of the problems.
Reports by the Department of Work and Pensions and the Office of Fair Trading on the UK liability insurance market have been greeted with somewhat less than resounding praise, as the ECA claimed that both reports "merely set out the problem without any real timetable for actioning solutions".

Premiums for employers liability insurance have been rising so fast that companies can not afford to take out cover. The reports found that in several business sectors employers were facing increases of up to 368% in employers liability insurance and up to 500% in public liability insurance.

The reports propose to lower the costs of resolving claims, provide for longer renewal periods and to take into account individual company's health and safety records when calculating premiums. These measures were welcomed by the ECA but association director David Pollock feels more could still be done. "We are concerned about the lack of a timetable for real action. Both of the reports acknowledge that there is a severe problem, one that with the continued increase of premiums will get worse," said Pollock. "And yet neither report intends to do anything about it apart from continue to monitor the problem and report back later in the autumn. In the meantime, many companies are suffering financial pressure as a result of the increases, which may have terminal consequences for them."

The proposals were also attacked by shadow industry minister Henry Bellingham. He said action was needed to prevent businesses going under or trading without cover. "There is a crisis out there and businesses need action," he said.

In response, Patricia Hewitt, trade and industry secretary, expressed the Government's concern and insiders said that the DTI had not ruled out a Competition Commission enquiry.

Source

Electrical and Mechanical Contractor