The rate of increase of liability cover for businesses slowed significantly during 2004 due to better workplace risk management, according to figures from the ABI.

A survey of ABI members showed that average rate rises now reflect personal injury claims inflation rates.

In 2004 the average employers' liability premium rose by 7%, while the average public liability and professional indemnity premium increased by 4% over the same period. This compares with 30% or 40% increases seen during 2002.

The ABI warned that further reform is needed if rises in workplace accident compensation rates are to be stemmed.

In 2003 UK insurers paid £8.5bn for personal injury claims, an increase of 50%, or 13% in real terms since 1993.

Brit in its recent full year 2004 results said rates for UK liability business had fallen during the 2005 renewals compared to 2004 .

Zurich said if risks did not deteriorate it would not increase rates.