The small and medium-sized enterprise group ISME has said insurance costs are forcing companies to cut staff numbers and in some cases close down .
In a preview of its submission to the Joint Oireachtas Committee for Enterprise and Small Business, due to be presented tomorrow, ISME says insurances costs have risen by 290 per cent since 2001, and 52 per cent in the first six months of this year alone.
"This situation has now become untenable and unsustainable, with many companies either seriously underinsured or trading with no insurance whatsoever," ISME Chief Executive, Mr Mark Fielding said this afternoon.
"Insurance increases are driving many SMEs out of business, wiping out profits, draining reserves and in some instances even forcing companies into the shadow economy".
To date, ISME says, approximately 100 companies have closed with the loss of 3000 jobs, specifically as a consequence of the insurance crisis.
Sectors particularly under threat are companies involved in the tourism, engineering, construction, transport and chemical industries, the submission will argue.
While acknowledging the roles of the legal and medical professions through excess charging for their services contributing to higher premiums, Mr Fielding apportioned the majority of the blame on the insurance industry itself, which he claimed has been profiteering on the back of the business community.
"For any company lucky enough to get a quote, insurance companies are forcing them to accept these inflated premiums because of lack of notice provided and lack of competition," he said.
"Effectively the insurance industry is putting a gun to the heads of small business owners with their 'take it or leave it' attitude."
This he said, flew in the face of Eurostat figures that confirmed that Ireland has the lowest incidence rate for accidents at work, in some cases three times less than in other European countries.
He called on the Joint Oireachtas Committee to bring pressure to bear in order to introduce a series of measures to address the issue. serious issue.
Among the measures are:
- the establishment of an independent committee to monitor insurance industry pricing
- legislation obliging insurance companies to notify business well in advance of premium renewals and not to make settlements without recourse to the insured
- the immediate introduction of a Book of Quantum similar to the system which operates in the UK. This would help to eliminate the uncertainties that presently exist in the current legal system with regard to awarding costs and in turn would lead to reduced legal costs