Rising insurance premiums adding to cost of construction
The CIF has warned that rapidly increasing insurance premiums are adding to the cost of construction. Over the past year, construction companies around Ireland have reported disproportionate increases in Employer Liability/Public Liability (EL/PL) premiums, rising by up to 50% in some cases.
Director of Safety and Training with CIF, Dermot Carey said: “Increases of this level are unsustainable and unjust. While companies expect premiums to increase as their turnover grows, the experience on the ground is that these increases are have grown disproportionately. Claims settlements are also rising in the Courts and in the Injuries Board, for what appear in many cases to be minor injuries or indeed questionable injuries.
The effectiveness of the Injuries Board procedures are being eroded by the considerable rise in the value of claims and the new Book of Quantum as well as loopholes that allow claimants to move quickly through the Injuries Board process, by not fully engaging- for example not agreeing to attend medicals.”
A number of leading insurance experts have suggested that if insurance premiums continue to rise within the construction sector, many companies will no longer be able to afford cover. According to a report from Insurance Ireland earlier this year, insurance fraud costs Irish businesses up to €200 million a year, with rapidly rising premiums cited as a direct result of court awards for injuries.
“Ultimately, increased construction costs may impact on housebuilding activity or in the reduction in value for money in the delivery of infrastructure. These increases impact on companies’ bottom line and as a result their overall ability to do business. The value of claims needs to be addressed and brought in line with European norms and the Injuries Board needs to be given more powers to be more effective in dealing with claims. If claimants do not meaningfully engage with the process, their claim should be invalidated.
The CIF welcomes the establishment Cost of Insurance Working Group and the resulting report issued in January on motor insurance. We believe that many of the recommendations arising from this report will transfer to the EL/PL scenario. There is an urgent need to deal with the EL/PL insurance regime that is impacting on all employers and we trust their recommendations will be implemented without delay. We urgently need to see a stable insurance market that delivers fairer premiums for consumers.”