The Small Firms Association (SFA) has told the secretary to the Government that the exorbitant cost of insurance is the biggest issue threatening Irish business and must be addressed by the new administration.

The SFA's delegation told Mr Dermot McCarthy yesterday that its members were facing further increases in insurance premiums of around 22 per cent next year. This follows increases of 70-120 per cent this year.

It has warned that such premiums will threaten the solvency of many small firms.

"There is only one issue as far as we are concerned. We will be seeking a meeting with the new government very early into its term of office," said SFA director Mr Pat Delaney after the meeting.

The association has demanded that the issue form part of the next Programme for Government.

The SFA has warned that it will be particularly important for the government to withstand opposition to the establishment of a Personal Injury Assessment Board (PIAB), which the association is urgently calling for and which it believes will help to depress the cost of insurance.

The difficulties in securing certain types of cover is also considered a serious problem, according to the association.

"A substantial number of jobs are being put at risk. Already some companies have closed because of increasing insurance costs and there is no doubt that, unless urgent action is taken, further company closures and job losses are inevitable," Mr Delaney said.

Among the SFA's chief complaints are the severe limitations and restrictions being imposed by insurers on small companies. In particular, firms are finding it almost impossible to get insurance against damage caused by terrorism.

The collapse of the Independent Insurance group has also led to higher insurance costs as many firms were forced to take out alternative cover as well as meeting any outstanding claims from their own resources.

The SFA estimates the total cost of the failure of Independent Insurance on Irish companies at €190 million.