The Liberal Democrats have visited insurers and brokers to prepare their response to the government liability reviews currently underway.

MP Brian Cotter, the Lib Dem's small business spokesman, recently tabled an early day motion in parliament, calling for a solution to the lack of cover available to some industries.

Members of all political parties have supported the motion.

Cotter met AXA, Allianz Cornhill and Biba to gather information for his response to the Office of Fair Trading's liability review and the Department of Work and Pensions' employers' liability inquiry.

Cotter said he had identified three key issues: the lack of a link between risk and premium, insurers' disinterest in individual companies' health and safety records and the high legal cost of claims. "At present the link between actual risk and the cost of cover is so weak that there's no incentive for businesses to try and reduce their risk," he said.

"The emphasis at present is on insurers to reduce the risk rather than on employers.

"This emphasis won't change unless there is a financial incentive."

Cotter said premiums should be set on individual risk management records rather than industry-wide claims histories.

He said there should be greater emphasis on mediation in claims disputes to stem rising legal costs.