Businesses that understated their wages and turnover levels in figures given to insurance companies are facing hefty premium increases as insurers implement new rules for employers and public liability cover.
These increases would come on top of general premium increases already signalled of 40 per cent plus due to high claims costs and poor underwriting experience.
Brokers have suggested premiums could more than double for some companies as a result. Companies which have made the biggest understatements will face the greatest increases in insurance costs.
Hibernian, the largest general insurer in the Irish market, is now asking insurance brokers to supply audited wage and turnover figures and projections for the year ahead for clients seeking liability insurance. The company has warned that policies will not be renewed and premium levels will not be quoted until the required information is supplied.
Hibernian confirmed it has written to brokers setting out its requirements for "updated exposure information".
Because of the considerable administrative issues involved for brokers the company recently met with the Irish Brokers' Association to agree how the new rules will be implemented.
Wages and turnover levels are an important element in determining liability premiums because they are a significant determinant of the level of risk being carried by the insurer. Employers and public liability insurance covers accidents, injury or damage in the workplace or caused in the course of work being carried out by the employer.
Insurers have been concerned that some companies have been understating wage and turnover levels to reduce their insurance costs.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)