RSA’s Brown calls for a limit to claimant lawyers’ costs to pay for ELIB

RSA chief executive Adrian Brown estimates employers’ liability (EL) premiums could rise by as much as 7% if insurers have to pay for a fund of last resort for untraceable claims.

The government has just finished a consultation for an Employers’ Liability Insurance Bureau (ELIB), to compensate claimants who can’t trace back their original insurance cover, usually because the employer ceased trading years ago. Brown heads up the Employers’ Liability Tracing Office, which keeps a database of EL claims.

He said the fund would hurt companies only just recovering from the recession, as premiums may have to rise between 4% and 7% to pay for ELIB. Instead, Brown wants the government to work with insurers to limit claimant lawyers’ costs, which are around a quarter of the payment costs for insurance companies.The money saved could then be used to fund the bureau.

“Insurers will pass the cost onto companies and, with the recession having just passed, that is not the most sensible thing to do,” Brown said. “We have got to work with the government, rather than going to other sides of the boxing ring.”

Brown is also calling on the government not to limit flood defence spending because of the deficit savings. He says that would lead to more insurers pulling out of offering cover to at-risk homes.

His comments were backed up by Towergate chairman Peter Cullum, speaking during a Biba seminar event called ‘Professionalism in a Changing World’. “We are not a registered charity; therefore there needs to be much more of a partnership with government if they want to build properties on floodplains,” he said.

A spokesman for the Department for Work and Pensions, which is carrying out the ELIB consultation, said staff were currently looking at responses and would carefully consider the comments.