Government announces changes to liability insurance

From early 2005, companies that employ only their owner will be exempt from purchasing employers’ liability compulsory insurance.


From early 2005, companies that employ only their owner will be exempt from purchasing employersÂ’ liability compulsory insurance.

From early 2005, companies that employ only their owner will be exempt from purchasing employersÂ’ liability compulsory insurance.

The decision, announced by minister for work Jane Kennedy, follows a wide-ranging consultation on whether or not to remove the requirement. She said the move could benefit “hundreds of thousands of limited companies where the owner is the sole employee”.

The Government estimates that there are around 300,000 such companies across the country. The increasing cost of employers’ liability insurance premiums – some have risen by 50% in 2002 and a further 20% in 2003 – have threatened small firms with closure.

“Removing this requirement will help many small businesses whose owners have told us they cannot afford to buy this compulsory insurance. We have given everyone the chance to have their say in the matter and listened to their views,” commented Kennedy.

She added that the change will bring small companies that have a single employee who owns the company into line with similar unincorporated businesses.

However, the Forum of Private Business (FPB), a lobby group for small- and medium-sized enterprises, said that while it welcomed the decision, such a measure would only help a small number of businesses.

“Some sectors are being hit with massive insurance premium hikes, such as scaffolders, while window cleaners struggle to get employers’ liability at all. There are many conscientious employers who want to offer the best health and safety protection for their staff but their pockets are being hammered by sky-high premiums,” said Nick Goulding, FPB chief executive.

He called for more action from insurers and the Government to “end what is a major and expensive problem for many small businesses”.

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(19/10/04)

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