Employers' organisation blames lack of political interest in ABI long-tail scheme

The Engineering Employers Federation (EEF) has expressed doubts over the ABI's plans to establish a separate fund for long-tail employers' liability (EL) risks.

EEF director of health, safety and environment Gary Booton said he felt political interest in the issue had "dried up". He said he could not see plans for the pool coming to fruition unless the issue was forced by one of the major insurers pulling out of the EL market.

Booton said members of the EEF, which represents 6,000 UK manufacturing organisations, had also expressed concerns about the structure of the fund being proposed by the ABI.

The ABI has proposed that the pool should be funded by a levy on employers, but Booton said that EEF members saw the proposed model as a "non-insurers fund" and had raised questions about insurers being involved in its management.

He said that additional problems existed in trying to convince businesses that were self-insured or operated captives to join a national fund.

A recent survey of 800 EEF members found that 23% reported an increase in their EL premiums at 2004 renewal.

Meanwhile, the ABI has confirmed it will publish a one-year review of its Making the Market Work initiative.

The scheme, launched last September, sets standards to allow businesses with good health and safety practices to be rewarded with lower EL premiums.

Last month the scheme was criticised by the British Printing Industries Federation, which was one of the first trade associations to be involved.

In a report it claimed that its members had seen little difference in the way insurers determined EL premium levels.

'Biba head of technical services Peter Staddon said that a government exemption expected to be granted to sole traders would have a "minimal" impact on the industry. The exemption would remove the requirement for sole traders to have EL cover as compulsory. The proposal was made in the Department for Work and Pensions' report into the EL market.