The Government has set out an agenda for action to help business deal with the costs of Employers’ Liability Compulsory Insurance.

The report lays out specific proposals that the Government is committed to as part of the longer-term agenda. These include:

• Leading a step-change in vocational rehabilitation, with the publication of a new “Framework for Vocational Rehabilitation”
  
• Developing pilots to test new ways to resolve claims more quickly and with fewer associated costs. Looking at the future possibility of fixed-fee schemes for Employers’ Liability
  
• Working with insurers, business and the HSE to develop an approach to underwriting which better reflects the health and safety performance of individual firms.

In addition, the Government is working immediately to help business by postponing the introduction of the recovery of NHS Charges for personal injury claims, including Employers’ Liability, by one year to November 2004; reviewing the need to insure for 300,000 of the smallest single owner-employer companies; and providing improved guidance and information on the new Small Business Service website, currently being developed.

As the second stage and final report on the Review of Employers’ Liability Compulsory Insurance was published, the Minister for Work and Pensions, Mr Browne said:

“The Government recognises that too many businesses have faced steep price increases, late renewals and premiums that fail to reflect their health and safety record. This has been reflected across the UK with representations being made about the availability of affordable cover in Northern Ireland, Wales and Scotland. The market hasn’t failed, but it hasn’t been working well enough.”

The CBI praised the government’s attempt to stabilise the underlying increases in business insurance costs and responding by saying it particularly welcomed the fresh drive to speed up the rehabilitation of employees.

John Cridland, CBI Deputy Director-General, said: “Clearly this issue cannot be solved overnight, but I urge government and the insurance industry to maintain the positive momentum that has reduced business premiums over recent months. Companies will be relieved that last year’s 50% increases in insurance costs have not been repeated, but the process for resolving claims remains too expensive and legal and administrative costs must be scaled back.”