Employers face liability insurance time bomb

Manufacturing companies are urging the Government to reform the worker
compensation system to reduce spiralling employers’ liability insurance

Responding to the Department of Work and Pensions consultation on the
potential for a review of employers’ liability insurance, the Engineering
Employers’ Federation (EEF) warns that failure to radically review the system
will be a missed opportunity to reduce welfare costs, improve the UK’s poor
record on helping ill or injured people back to work and avoid further business
failures driven by rising insurance premiums.

The EEF wants a new system that would make insurance premiums reflect
individual company risk, put the emphasis on rehabilitating staff, and cut the
use of litigation to settle claims.

Employers’ liability insurance premiums grew by an average of 50 per cent in
2002, however, the EEF said some companies saw a rise of up to 400 per cent.

EEF director general Martin Temple said: "Current arrangements for
employers’ liability insurance are not sustainable and a fundamental review is

He added: "The employers’ liability insurance timebomb is ticking, and
failure to seize this rare chance for change could be disastrous for business,
for claimants and for society."

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