Insurers must fight hard against ELIB

You can just imagine claimant lawyers rubbing their hands in glee at the thought of taking more money off insurers. But that’s the unpleasant scenario facing insurers if the Government pushes ahead with plans for an Employers Liability Insurance Bureau (ELIB). If ever there was a time for the insurance industry to plan its hand forcefully, it’s now.

RSA chief executive Adrian Brown’s suggestion is a good one. He suggests limiting claimant lawyers’ fees, then insurers will be more agreeable with the concept of ELIB. As the Jackson Review demonstrated, claimant lawyer fees are totally disproportionate to the claims they fight for.

If insurers are left to bear the cost alone, it could raise premiums as Brown suggests, in essence causing a mini-tax on businesses that have kept their records and books in order.

His argument is strengthened by the fact that many of the businesses missing documents would not have had employers’ liability cover. In effect, ELIB would be punishing today’s firms for the mistakes of companies in the past.

The other final point is that the fund could cause employers’ not to take health and safety seriously, knowing there’s a fund of last resort to bail them out.

The bottom line is that if there is to be an ELIB fund, then there has to be considerable concessions from the Government. It must recognise the illogic of burdening struggling businesses with extra premium costs.

Let's hope the Government considers this when it looks at the consultation repsonses.

There’s an old saying about consultations: it's the dead man’s last wish before being hanged. Both insurers and the ABI need to act together immediately to make sure that’s not the case this time.