CBI welcomes solution for insurance rises

The
CBI has praised the Government for its sensible proposals to soften the effect
of ‘unsustainable’ rises in insurance premiums that are threatening the cost
base of many companies.

But
it urged ministers to allow no further delay in turning its short-term measures
into immediate relief for hard-pressed businesses.

Reacting
to both the government review of employers’ liability insurance and the Office
of Fair Trading’s (OFT) fact-finding study, published this week, the CBI said
it offered a rational look at what is a complex problem.

CBI
deputy director-general John Cridland said: "The Government has taken some
positive first steps towards easing this critical problem. No-one pretends that
there are easy solutions.

"Some
of the fundamental issues will take time to crack, but we must not lose sight
of the impact this is having now. Insurance cost increases averaged 50 per cent
last year and threaten the cost base of many companies.

"The
OFT study has helped to explain why this has happened. Small firms, in
particular, need urgent help. The Government has come up with some worthwhile
short-term proposals and must act swiftly to make sure they make an immediate
difference."

The
CBI welcomes plans for minimum notice periods for insurance renewals. Too often
businesses are given only days to react to huge premium increases leaving them
little opportunity to shop around.

Small
businesses in particular will welcome increased efforts to link premiums more
closely to their specific health and safety records.

"The
vast majority of firms are law abiding and take out the insurance the law
requires. They will be pleased with new efforts to clamp down on those who seek
unfair advantage by failing to do so," said Cridland.

By Ben Willmott

Comments are closed.