CBI and brokers dismiss safety argument for premiums boost as self-defeating

Conflict has broken out between government, industry and trade bodies over solutions to the employers' liability (EL) crisis.

The TUC and the Health & Safety Commission (HSC) both advocate an increase in EL premiums. But Biba and the CBI are strongly against such a move.

Speaking at the Iron Trades annual conference, TUC senior policy officer Owen Tudor said premiums need to rise as there is no economic incentive for insurers to provide risk management advice.

Tudor said: "EL premiums need to be increased substantially so that the insurers can give something back, such as rehabilitation and risk management advice".

And HSC chairman Bill Callaghan said that the current system does not promote better health and safety practice. He argued that increasing premiums would achieve this.

He said: "The cost of health and safety failures should to be borne by employers." He added that the cost of increased EL premiums could be offset by reduced taxation, such as National Insurance contributions.

But CBI head of group company and commercial law Rod Armitage was adamant that the CBI's members would not support such move.

"EL premiums are already increasing," he said. "One of the problem is that the health and safety records of small companies are not considered."

Armitage said that an insurance pool should be established to cover long-tail diseases.

Biba chief executive Mike Williams was also very concerned by suggestions of increased EL premiums. "If you want to improve health and safety, it is self-defeating to charge more. Insurers will find a return on their investment if they work in partnership with businesses to provide risk management advice and not simply charge for it," he said.

"Why should insureds pay more? The suggestion needs to be better thought out."