Half of owners and managers claim they can not afford an increase in liability insurance premiums, while over two thirds express concern that new hikes could force them to close their doors.

Steep hikes in insurance premiums are causing concern for the UK’s small and medium sized businesses, with many firms still finding it hard to find cover at all.

Research by Bibby Financial Services found that a significant 94 per cent of small to medium sized businesses are worried that employers liability insurance premiums will go up even further this year, forcing many business to cease operations.

Further premium hikes would also add to ever increasing levels of red tape, with 83 per cent of entrepreneurs complaining that the sector is already over regulated.

Fears regarding rising insurance premiums reflect growing concern among employers over the UK’s growing compensation culture. With the average cost of defending a claim now around £5,000, it’s not surprising that employers are nervous.

David Robertson, Financial Chief Executive at Bibby, said, “ The rising tide of employee injury claims and the growing compensation culture in this country is taking its toll on the small business sector.

“The prospect of further increases in employers liability insurance doesn’t bear thinking about.”

The Forum of Private Businesses has already pointed out that that the small business sector accounts for 45.4% of the U.K’s turnover. With this in mind, insurance premium hikes for struggling small businesses could prove detrimental to the economy.

Robertson said, “I hope that the Government listens and that businesses across the UK won’t have to face any more increases in the coming years.”

Whilst there is nothing employers can do to cut insurance premiums, the following tips may help to limit the damage:

  • Shop around
    Never accept the first deal that is offered but do some research and compare different policies and premiums.
  • Take your time
    Do not leave it until the last minute to renew your policy. Allow time for the insurer to survey premises and make a thorough health and safety assessment.
  • Train staff
    Improve employee’s awareness of health and safety measures such as spotting potential hazards and training them the correct way to lift heavy objects.
  • Regularly review
    Undertake an annual health and safety audit detailing any actions needed
  • Reduce risk
    Carry out risk assessments to look for potential hazards by double checking everything.
  • Consult an expert
    Many firms specialise in carrying out safety checks in the work place.