COMMERCIAL REVIEW: High Cost of Insurance Is Crippling Small Firms; High Insurance Is Killing Small Business in Northern Ireland, Says the Federation of Small Businesses. WILFRED MITCHELL Looks at the Crisis Which Is Threatening the Sector
Byline: WILFRED MITCHELL, FSB Northern Ireland Policy Chairman
IF YOU ask any small business owner what is their biggest problem, you can be very sure that high insurance premiums will be mentioned.
High insurance is continuing to increase in intensity, becoming the top issue for small businesses throughout every business sector within Northern Ireland.
We cannot emphasise the seriousness of this situation enough and, in particular, would urge that all Assembly members, councillors and members of Parliament to address this issue which affect many thousands of small businesses throughout their constituencies.
Research was carried out as a response to our members concerns and to substantiate the information expressed to the FSB from many varying sectors.
We are convinced by our research that it is an issue which not only affects all, but we feel it has particularly serious implications for the business community.
Based on our research of 375 businesses, the disastrous implications is that as many as a thousand jobs are under threat, as employers can no longer sustain the crippling effects of increased insurance premiums. Seventeen per cent of those businesses who responded stated that if this trend continues they will have to close.
According to our research, the average premium in 2001 was pounds 10,312. In the year 2002 this had increased to pounds 16,345. A staggering increase of 57.5 per cent. Manufacturing was the hardest hit sector, with many fearing that increased insurance costs would be the final blow for many operating within this sector.
FSB feel this is only the tip of the iceberg as they are dealing daily with businesses that cannot access insurance at any price. We also have knowledge that many are operating without adequate cover, particularly in the construction sector.
The implications of this are that honest businesses with proper insurance cover cannot compete for contracts. The extra cost of insurance reduces profit and if this cannot be passed on to the customers it closes the businesses. …