John Jackson says a solution to long-tail claims is urgently needed, but not at the taxpayers' expense

In recent years the insurance industry has been faced with paying out for employers' liability (EL) claims on

diseases which underwriters and actuaries did not know even existed when the policies went on risk. The Law Lords' latest asbestos ruling in Barker v Corus UK, which deals with victims of mesothelioma, is a case in point.

The thought of claimants - or their lawyers - doing a paper chase of long-gone firms and insurers swallowed up by rivals, beggars belief. But how do insurers pay out without proof of liability?

The solution, say some in the industry, is to have a 'disease pool', in which this area of EL would be treated differently from the normal accidents in the workplace scenario.

Some weird 'diseases' have come to the fore in recent years, such as mobile phone usage causing brain tumours, physical damage caused by using computers, 'white finger'

syndrome and even 'acoustic shock' affecting staff at call centres. Where will it all end?

All this comes on top of earlier 'new' diseases such as repetitive strain injury (RSI). Who could have predicted claims under this heading coming from abattoir workers?

What other unknown species of beast lies hidden in the insurance jungle, waiting to sink its teeth into an unsuspecting industry?

Such ugly beasts can cause havoc both in pricing and assessing risk.

Industry sources believe that asbestos claims could continue to emerge for another 12 years - until 2018 - based on the US experience, where the problem emerged earlier than in the UK.

Sensibly, the industry set up Pool Re as

separate cover for terrorism claims, with the government acting as insurer of last resort.

But there is no likelihood - nor should there be - of the taxpayer being insurer of last resort on EL claims for diseases.

Compensation reform is now at the forefront of industry discussion, with a Bill having passed through the Lords and shortly to start work in the Commons.

So this is the right time to look at the pros and cons of a 'disease pool' in what has become a minefield for EL underwriters.

The remedy can only be found from within the insurance industry, and there seems to be an open-minded climate of opinion to do just that.

The field of EL-related disease claims could stretch into infinity. An industry-wide solution is both necessary and urgent. IT