September 2002

Insurance cost rises threaten companies

Crippling rises in commercial insurance premiums are threatening to send thousands of businesses to the wall.

The British Insurance Association (BIBA) have advised government officals that hundreds of businesses have already been forced to close because of insreasing premiums while many more are being forced to operate without insurance because they cannot secure cover.

The Federation of Small Businesses (FSB) research suggests that small companies are facing premium hikes of up to 500% and that many are struggling to secure Employers Liability Insurance - a legal requirement in the UK. This follows claims that soaring Employers Liability premiums could close businesses in 'high risk' sectors such as Building, Transport and mining.

While accepting that external pressures are responsible for the average 200% hike in premiums over the last 12 months, market experts believe many businesses aren't doing enough to keep their premiums down.

Businesses should update their risk assessments and safety procedures. Suitable management structures should also be put in place to ensure these procedures are implemented and maintained to minimise insurance costs.