Employers' Liability Insurance: key findings
This is the second comprehensive survey of EEF members’ experience of employers' liability insurance costs. During the Spring of 2005 a postal survey of EEF members was carried out. 804 useable replies were received and these form the basis of this report. The key findings are as follows:
- there have been significant changes in this market during the survey period – there has been no overall increase in cost of employers' liability insurance;
- the majority of members have reported either a static premium or a decrease;
- the use of deductibles remains a significant market feature and the value of these is increasing;
business-specific factors influencing the improved situation include changing broker, improving risk management and downsizing.
Whilst the improved market conditions are to be welcomed they follow a period of sustained price increases over a number of years. There is some emerging evidence that the current ‘soft’ market may be hardening. Whilst price increases during 2005 are not in themselves an issue, we believe that this policy area
requires fundamental reform. There are in-built weaknesses in the current arrangements and significant opportunities to be gained from change.
The case for reform
We call upon government to be bold and decisive in this policy area – seeking root and branch reform. Only in this way can we re-focus the system away from financial compensation and towards:
- rehabilitation
- remediation
- return
- recompense for any residual loss
The enormous premium rises experienced by businesses in 2001–2003 have abated. However, whilst the immediacy of the call for reform may have receded, we believe that the case for reform remains a strong one.
Regardless of the way in which the insurance market performs in coming years, one thing is clear – a system which has financial compensation rather than rehabilitation and return to work as its focus is one that is not serving the best interests of society. It is in the interests of business, employees and the community as a whole to ensure that those injured or made ill by their work can return to a productive life as soon as possible. This should be the central purpose of this policy.