Concerns grow over insurance costs for businesses

Business leaders and politicians have backed calls for an urgent assessment of the rising cost of business insurance.

The Federation of Small Businesses say that small businesses are facing 500% increases in their insurance bills as the cost of premiums rocket.

Business leaders and local politicians have called on the Treasury to use Insurance Premiums Tax (IPT) revenue to help avert a growing crisis in the small business insurance market.

With an estimated £1.9 billion raised from IPT in the last financial year, the FSB has proposed that in 2002/2003 any IPT ‘take’ over the projected £1.9 billion should be used to provide a "pool" of employers' liability insurance backed by the government.

With some firms finding it impossible to obtain employers' liability insurance which is a legal requirement in the UK, the FSB has warned many small firms are facing a stark choice - either trade illegally or shut down.

Sinn Féin's assembly member for Foyle, Mitchel McLaughlin, has said that "immediate and radical" steps need to be taken to reduce insurance costs for small and medium-sized enterprises.

Mr McLaughlin was speaking following concerns expressed to him by a number of owners of small to medium-sized businesses that indicated many businesses are considering having to reduce the size of their workforces as a result of being burdened with massively increased insurance costs over the last year.

The Sinn Féin MLA called on the Minister for Enterprise, Trade and Investment, Sir Reg Empey, to examine how best his department can help address these difficulties being experienced by small business.

With the current situation regarding insurance costs "seriously jeopardising" jobs, Mr McLaughlin called for the setting up of a committee of inquiry into the workings of the insurance industry.

(SP)