The Government has announced a series of measures to help businesses in the face of the rising cost of employers' liability insurance.

The proposals include working with the insurance industry to create risk-related premiums to reward firms with good health and safety records, to giving firms more time to shop around for the most competitive cover.

The Government will also look at whether insurance for long-term industrial diseases, which are a major factor in increasing cost of cover, should be offered separately from general liability insurance.

Employers' liability insurance is taken out by firms to cover themselves against claims if a worker is killed or injured at work.

But premiums have soared by up to 50 per cent during the past year as costs have been pushed up by increased claims for industrial diseases such as asbestosis and a huge rise in the number of personal injury claims.

Minister for work Nick Brown said: "Many businesses were hit hard by employers' liability insurance premium increases last year.

"The standards of the insurance industry will be put firmly under the spotlight as we go forward to ensure the fairest deal for all concerned."

In the short-term, the Government is calling on insurers to give firms more notice of when their policy is due to be renewed.

It also wants the industry to develop self-assessment packages to enable businesses to give insurers better information on how they manage health and safety risks.

In the long-term, the Government wants to see more emphasis put on getting people who have been injured back into work, as well as looking at ways to reduce the legal costs involved in disputes, which account for around 40 per cent of insurers' costs.

Oliver Heald, shadow minister for work, said the Conservatives welcomed the proposals for risk-related premiums and self-assessment for businesses.

Wednesday June 4, 2003