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The FMB has the opportunity to respond to the Government's review being undertaken by the Dept. for Work and Pensions. Your help is needed!
In his pre-Budget Report in November Gordon Brown acknowledged the problems that some employers have faced in securing Employers Liability insurance. The problems have highlighted concerns that there are underlying and long-term difficulties with the way Employers Liability insurance operates and the views of all interested stakeholders has been invited.
FMB has partnered with Aon and Marketing Improvements to design a survey and to analyse the results. Your response to this survey will be confidential. Taking the time to complete this survey (approx. 10 mins.) will help FMB respond to the Government on this crucial issue that affects all our members.
Terms of Reference of the DWP Review
- Survey the operation of the Employers Liability system, taking account of any relevant aspects of the state benefit systems.
- Assess the scale and nature of the current difficulties, in particular the extent to which they are likely to be short-term only, repeated in the future, or permanent
- Make recommendation as to the case, or otherwise, for reform
- If a case for reform is found, make recommendations as to the objectives, principles and high level options for such reform.
Some background information
Since 1971 Employers Liability Insurance has been compulsory.
Until recently the premium for such cover has been broadly stable but as a result of increasing losses being sustained by the insurance market costs in 2002 rose significantly and many businesses have been unable to obtain cover at an affordable price. Some businesses, especially in the SME construction sector, have been unable to obtain cover at any price.
A number of factors have created and fuelled this crisis:
- increased number of claims brought about by changes in social attitudes leading to a 'compensation culture'
- the amount of damages awarded and the associated legal costs
- the emergence of previously unknown 'diseases' often caused decades ago and which have to be met from current reserves
- other conditions such as work-related stress, passive smoking which continue to emerge
- severe reduction in market capacity for Employers Liability business which has failed to produce a profit for almost all insurers over the past 10 years
The deadline for completion of the survey is 3rd February.
First posted: 21 January 2003. Last modified: 3 February 2003.
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