New measures aimed at softening the blow of employers' liability insurance (ELI) have been met by muted applause from small businesses.
The rules mean that sole trader companies - or those that employ just one person - will no longer have to purchase the insurance.
It is estimated that 300,000 companies will be affected by the rules change - with a saving of £250 a year on average.
Work minister Jane Kennedy said: "Removing this requirement will help many small businesses whose owners have told us they cannot afford to buy this compulsory insurance."
But business groups called the rule change a half measure that would not improve life for the vast majority of small businesses - some of which have seen premiums doubling and trebling in recent years.
Nick Goulding, chief executive of the Forum of Private Business, said: "Some sectors are being hit with massive insurance premium hikes, such as scaffolders, while window cleaners struggle to get employers liability at all.
"There are many conscientious employers who want to offer the best health and safety protection for their staff but their pockets are being hammered by sky high premiums.
"More action is needed from insurers and government to end what is a major and expensive problem for many small businesses."
The government is currently consulting with industry and insurers about potential steps to ease the problem.
