The EL crisis has not affected most SMEs. In fact, 96% of them say they have had no trouble in obtaining cover. But results in Zurich's SME Index, which monitors confidence levels among SMEs on a quarterly basis, reveal that 79% are concerned about rising insurance premiums
In the current employers' liability (EL) cover crisis, one could assume that SMEs would be feeling the pinch as well.
But exclusive new research from Zurich reveals that 79% of SMEs are more worried about affordability than availability of EL cover.
David Smith, distribution and marketing manager for Zurich's UK commercial business, says: "While we recognise that a small minority of businesses are having difficulty in obtaining cover, this result confirms what we believe to be the key issue in the current EL market - not availability, but affordability.
"What customers now need to know is what they can do to control their EL premiums."
Zurich has worked with brokers over the past year to explain the reasons behind rate increases. Now the insurer is asking brokers to help customers understand the measures they can implement to help to take risk out of the business, and contain residual risks.
All of this will impact on future insurance costs.
Smith says: "There are three main areas that affect the pricing of EL policies: external economic conditions; the legal climate and effective risk management.
"Companies can do little to influence the first two categories, but the third is very much in the hands of each business."
Zurich is asking brokers to highlight the following steps that businesses can take to improve their control of risk and contribute to containing future insurance costs:
Smith concludes: "At Zurich we have risks where the EL premium quoted has been influenced by the ability of businesses to show evidence of health and safety improvement utilising the management systems mentioned above as a base.
"While some companies may see the introduction of effective health and safety measures as a potential burden, all the available evidence is that good risk management makes good business sense.
"In a business climate in which there are increasing demands for business to be able to evidence corporate social responsibility, effective risk management of occupational issues is high on the agenda."