Export companies are finding themselves uninsurable and forced to trade illegally, because of difficulty obtaining employers' liability (EL) cover.
The Federation of Small Businesses (FSB) has this week written to minister of state for work Nick Brown to express its concern over the difficulty in obtaining insurance for small businesses.
The letter highlights the effect the shortage is having on exporters.
It emphasises that the vast majority of businesses affected by the current insurance crisis have been in existence for a number of years and have excellent health and safety records. Most have not made claims against their insurance policies.
FSB national chairman John Emmins said the crisis was stifling the "dynamic" export sector. "In a recent survey of 18,000 FSB members, nearly a quarter of all training that took place in small firms was related to exporting," he said.
He added that the FSB was advising businesses without EL to cease trading immediately.