Rapidly rising insurance premiums are forcing an increasing number of companies to operate without insurance cover and could lead to company closures and job losses, according to the Irish Business and Employers' Confederation (IBEC).
Some companies are facing premium price increases of more than 100 per cent this year, while others are finding it difficult, if not impossible, to get insurance cover at all, according to IBEC director of enterprise Mr Brendan Butler.
Stating that the situation was now "critical", Mr Butler called for an urgent examination of the factors behind the steep price increases, to determine the remedial action required.
IBEC has set up an insurance users' group which will meet Irish Insurance Federation representatives today.
Insurance premiums in the Irish market were considerably higher than in other jurisdictions, despite the State having the second-lowest accident rate in the European Union, Mr Butler said. For every €100 (£79) paid in insurance by an Irish company, the equivalent charge in the UK would be €34, while in the Netherlands the cost would be €13. He said the average award in Irish courts was 12 times higher than in the UK.
IBEC has proposed a number of measures to improve the situation, including the immediate establishment of the proposed Personal Injuries Assessment Board which, it said, would reduce the legal costs currently comprising about 50 per cent of all awards made. It wants the Solicitors (Amendment) Bill 1998 brought forward so that advertising by some solicitors which it claimed fuelled the compensation culture would be outlawed.
Pointing out that personal injury compensation costs business and the State about €2 billion each year, Mr Butler called for stiff penalties to be imposed automatically on people who make spurious or exaggerated claims for compensation. The current method of handling claims was fuelling a growing compensation culture and was rife with abuse and poor decision making, he contended.
Referring to the fall in the number of companies competing in the general insurance market - because of mergers and takeovers and the demise of Independent Insurance - he said it needed to be established if this was contributing to the current increases in premiums.
