Government report warns of impact of more rises in insurance premiums

A government report has warned of further increases to employers’
liability insurance and recognised the impact of the rising costs
on care homes.

The interim report from the Department for Work and Pensions’
review of employers’ liability compulsory insurance says that most
insurers intend to increase rates over the next 12 months. Rises
are forecast to be “significant, albeit smaller than those seen
over the last year”.

Care homes have already been hit with higher premiums, which they
have struggled to pass on to councils (news, page 16, 13 March).
Some children’s homes’ premiums have risen by as much 1,000 per
cent.

But, DWP minister Nick Brown said the government was well aware
that many businesses had been “hit hard” by the insurance hikes and
was committed to stabilising the market.

The report says the government is to look at encouraging the
insurance industry to reward firms with good health and safety
records and give firms more time to shop around for competitive
cover – some homes complain of being given a new quote by their
insurer just a week before the old policy is due to expire.

David Ayers, chairperson of the Association of Independent
Childcare Providers, said his members were expecting more rises and
councils would ultimately have to foot the bill.

“We have to pass changes onto the customer, but councils find that
hard to understand,” Ayers said. “The rises have seen some people
go to the wall.”

Tom Starkey, vice-chairperson of the National Association of
Independent Resources for Children, said: “We can’t absorb these
kinds of costs and inflationary increases from councils aren’t
enough. It will force some operators to ask councils for an
insurance levy for the first time.”

– Interim report from bob.elam@dwp.gsi.gov.uk 
Final report due in October.