20 September 2004 - Costs of Employers' Liability Compulsory Insurance Unstable
The British Chambers of Commerce (BCC),
states that despite the risk assessments response from businesses, the costs
of premiums still continue to rise, creating pressures on British
businesses.
The Government and Insurance Industry advised UK businesses, that risk
assessment strategies would ease the impact of costs with the Employers
Liability Compulsory Insurance (ELCI). However, despite many
members putting the assessments in place, the premiums continue to rise.
The BCC found that in a survey of 600 members, almost three-quarters
experienced increases in their ELCI costs over a twelve month period, of
which one third have suffered between 20% and 50% rise.
ELCI premium levels should be based on a company's health and safety record
and risk management practices that they have in place. Risk
assessment strategies, which had been put in place by 40% of companies found
that over half had made a positive difference to their premiums.
Director General, British Chambers of Commerce, Mr. David Frost, said:
"The high cost of ELCI is having a direct and sustained impact on UK business. 70 per cent of our members questioned have seen profits cut as a result of these increased costs and nearly one-third has been forced to cut investment. Manufacturing firms have been particularly hard hit, with 40 per cent of companies reporting that ELCI costs threaten their long-term viability. Firms in this sector are already operating at the margins and ELCI increases threaten to tip them over the edge. The ELCI market has clearly not stabilised.
"Action is needed to address this situation. Businesses should implement a risk assessment strategy as part of good practice, but they should also expect insurers to 'reward' such a strategy with a fair and accurate premium. We would therefore like to see the Government develop and implement a national health and safety index that will help firms to assess genuine risk and communicate this to insurers".
Article by Alexandra Johnston
