Construction industry issues warning over liability insurance
‘Unsustainable’ premiums may impact housebuilding activity, says association
Spiralling insurance premiums are placing an “unsustainable” burden on construction firms, according to the Construction Industry Federation.
Member companies of the group have reported “disproportionate” increases in premiums for employer liability and public liability policies, with costs rising by 50 per cent in some cases, it said.
“Increases of this level are unsustainable and unjust,” the organisation’s director of safety and training Dermot Carey said.
“While companies expect premiums to increase as their turnover grows, the experience on the ground is that these increases have grown disproportionately,” he said, adding that court and Injuries Board claim settlements were also rising.
The number of public liability claims increased 3.1 per cent in 2016, while the number of employer liability claims rose 8.2 per cent.
In 2016, some 34,056 new personal injury claims were submitted to the Injuries Board, compared to 33,561 claims made in 2015. Some 12,966 awards were made in 2016, compared to 11,734 awards made in 2015.
The average award in 2016 was €24,305 compared to €22,878 in 2015.
Mr Carey said the effectiveness of the Injuries Board procedures was being “eroded” by the rise in the value of claims, among other factors.
The rise in costs would have knock-on effects across the sector, the association warned.
“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,” Mr Carey said.
The association is calling for the value of claims to be brought in line with European norms and wants the Injuries Board to be given greater powers for dealing with claims.
The body welcomed the establishment of the Cost of Insurance Working Group and its report on motor insurance. It said many of the recommendations in this report could be applied to the employer liability and public liability area.
“We urgently need to see a stable insurance market that delivers fairer premiums for consumers,” Mr Carey said.