Small to medium-sized enterprises (SMEs) are worried about employment and health and safety law and rising red tape, according to research by Zurich's commercial unit.

The insurer has shown that almost 70% of SMEs believe that their market is more competitive than it was six months ago and 53% are worried about health and safety regulations.

These concerns are closely followed by worries about new employment laws for 34% of respondents.

Zurich Commercial's underwriting and marketing director Roger Thrift said these concerns were not surprising, considering the cap on employment tribunal awards recently rose from £12,000 to £51,700.

At the same time, the qualifying period for unfair dismissal has fallen from two years to one, and the number of tribunal cases rose by 21% between 1998 and 1999.

"The conditions that businesses find themselves in are changing rapidly and it's imperative that they are aware of their duties and responsibilities," Thrift said.