Insurance hikes hitting NI firms

Contract builders are feeling the squeeze of rises

By James Kerr BBC Northern Ireland business editor

Soaring premiums are putting some local small businesses to the wall, it has been claimed.

Business leaders have said the issue has reached crisis proportions.

The BBC has learned that the Department of Enterprise has now set up a special unit to investigate the problem.

All insurance premiums are rising, but business says the big problem relates to employers liability and public liability insurance which companies are obliged to have by law.

'Massive rises'

The Small Business Federation has said premiums have risen by more than 200%, with some companies facing rises of 500%.

One local company JG Contract is typical. The firm employs 40 joiners in total.

One of its biggest contracts is the Lincoln Centre development in the centre of Belfast.

John Gillis: Insurance fees squeezing company

Last time company owner John Gillis renewed his insurance his total bill went from £7,000 to over 30,000. He expects it to rise to nearer £50,000 when it comes up for renewal again.

"It simply means that any plans we had for expansion are on hold," he said.

"The is a market rate for every contract, and the cost of insurance is simply putting us above the rate for the job."

Business organisations have been inundated with complaints.

Glyn Roberts: "Premiums are hitting business growth"

Glyn Roberts from the Federation of Small Business said it is harming the whole sector: "The insurers must realise that the small business sector is the backbone of the local economy, and this is hitting the growth of that sector.

"We are doing all we can lobbying locally and at Westminster."

The problems are not confined to industry.

Belfast Community Circus teaches young people circus skills and cant get insurance for activities for more than eight feet above head height.

The circus has said this is despite safety being at the core of its ethos.

'Claims culture'

For its part the industry says that for every pound it takes in premiums its paying out £1.50, blaming the growing claims culture.

On top of that there has been a big fall in the value of insurance companies investments, and additionally a major reassessment of risk following the September 11 US terror attacks.

The insurers say they have a crisis too.

The problem has now landed at the door of government.

Sir Reg Empey has now set up a special unit to investigate the problem, and there will be discussions on the subject with the secretary to the Treasury Ruth Kelly when she visits northern Ireland next month.

However sorting out this problem is not going to be easy - a few circus skills might just come in handy.