asked the Minister for Industry and Commerce if he is aware of the great difficulty being experienced by small building contractors in obtaining public liability and employer liability insurance at a reasonable cost; if he is aware that some have been asked premiums which are a 300 per cent increase over 1985-86; whether this could lead to many small builders going out of business; and if he will make a statement on the matter.
Written Answers. - Employers' Insurance Cover.
23.
(Limerick East): I am aware that some employers, including small building contractors, are experiencing difficulties in obtaining liability insurance cover and are faced with increased premium levels. I have expressed my concern at this situation on a number of occasions.
The root cause of difficulties in the liability market is the enormous underwriting losses being sustained by insurers on this class of business. These losses amounted to almost £36 million in 1983. In the face of losses of this size, insurers have naturally been more selective in the risks they take on and careful that premiums charged accurately reflect the risk being underwritten.
My statutory function in relation to insurance companies is to ensure that they meet their statutory reserve and solvency requirements. I have no power to compel companies to take on particular risks or to dictate to them what constitutes a reasonable cost. The cost of insurance is directly related to the frequency of claims and the size of the eventual awards. One of these factors is to a large degree under the control of employers. Studies have shown that a high proportion of industrial accidents are avoidable and consequently the importance of adequate safety precautions in the work-place cannot be over-emphasised. In relation to the size of awards made, the Minister for Justice recently published a Bill to give effect to the Government's decision to abolish jury trials in cases of personal injury. I am confident that this measure will result at least in a stabilisation of award levels and a consequent stabilisation of premiums.
For those finding it impossible to obtain a quotation for liability insurance, I have an arrangement with the Irish Insurance Federation to investigate these cases with a view to obtaining cover. Any individual case of difficulty should be referred directly to the insurance section of my Department.