CBI president Sir John Egan warned Airmic members in an annual lecture on Monday that rising EL costs were a threat to business.
He said: "The situation has become critical for business. The extent of the cost increases is threatening the existence of small firms."
Businesses may have to pay a levy on their employers' liability (EL) insurance premiums to fund long-tail risks.
Royal & SunAlliance underwriting director Ray Cox put forward the idea as one possible solution to what he called "unsustainable" problems in EL.