The government must help insurers and UK businesses fund the employers' liability (EL) crisis, according to CBI director-general, Digby Jones.

"How is it the government can give the trade unions, who are basically lobby groups, £10m to modernise and improve their skills?

"If it can spend money on this, then the government could carry the cost of EL, funding industry while it sorts itself out."

Jones commented on the state of the EL crisis before addressing delegates at the 2004 Marsh annual market address. The CBI is aligning itself with Marsh and endorsing its proposals on EL to the Department for Work and Pensions (DWP).

"Marsh is a valued member of the CBI and has an initiative that needs support. I'm prepared to put my personal support behind it."

Marsh UK chief executive Bruce Carnegie-Brown said it would be establishing a completely new EL practice incorporating all of the brokers divisions to create a holistic service for its clients.

Marsh wanted to tackle three main areas, he said. "First, we want to separate long-tail disease risk from industrial injury. Second, we must address the legal costs, particularly as 40% of EL cover is taken up on legal bills. We must find other solutions such as ADR.

"And third, rehabilitation and proper medical treatment must be central to the future EL claims handling procedure."

Jones added: "What is important for the debate is that if there is a Bills of Rights then there should be a bill of responsibility. Insurers must accept responsibility of an accident."

He also said the insurance industry was "taking positive steps" but still had the tendency to "settle too early and for too much."