SMEs face insurance crisis - SFA
Published 18/04/2016 | 02:30
Irish small businesses are facing an insurance cost crisis with the potential for "devastating consequences", the Small Firms Association (SFA) has warned.
The SFA said insurance costs have increased by 29.6pc since 2011, with the last year particularly difficult.
"Without quick actions from government this trend will continue, with devastating consequences for small businesses around Ireland," SFA chairman AJ Noonan said.
Mr Noonan said a "compo culture" had got out of control in this country in recent years.
He called for an overhaul of the Book of Quantum - the guidebook used by the Injuries Board to assess how much compensation should be awarded in personal injuries claims.
He also said the Injuries Board itself should be reviewed, and that Ireland should mirror British plans for a system of "care, not cash" in an effort to tackle fraudulent whiplash claims. The plans would mean whiplash claimants do not automatically get cash, instead getting medical care in minor cases.
Aviva Ireland said in a recent blogpost that car insurance premiums could be cut by €100 if the cost of whiplash compensation in Ireland was in line with the rest of Europe, saying that at €15,000 (per figures from insurers' representative group Insurance Ireland) the average whiplash payout was the highest in Europe.
AJ Noonan said that if the current situation continues "it will become impossible to do business in Ireland both from a domestic and from a foreign direct investment perspective."
"The significant cost increases being borne by small business is resulting in job losses and non-expansion by companies.
"Responsibility for addressing this crisis must clearly rest with a single minister, who can coordinate the actions needed by different departments and the Central Bank. It must be prioritised by the new Government as loss of competitiveness is the number one risk to Irish business in 2016."
He said businesses putting appropriate risk prevention and health and safety policies was as important as ever, but that this alone could not address "excessive awards, high legal costs [and] climbing premiums". Rising insurance costs have not been confined to businesses, with health insurance for families set to get dearer as a number of providers hike prices.