The Association of British Insurers says evidence of higher safety standards could curb skyrocketing premiums.
Contractors have been urged to provide more evidence of improving safety records if they want to hold down the soaring cost of insurance premiums.

The message was one conclusion of a half-day conference on the crisis in the insurance market for employers. It was held by the Association of British Insurers last Friday and attended by officials from industry trade associations.

The conference was brought forward from its original date as a result of construction industry leaders鈥� calls for help from insurers to reduce the price of premiums. Contractors have been faced with premium rises of up to 500% after the atrocities of 11 September and the growth of a litigation culture.

Barry Stephens, director of the National Federation of Builders, said that there was agreement at the conference that better risk management by firms was the best way to convince insurers that they were a safer bet.

He said: 鈥淭hose insurers that have remained in the market are looking to work with companies that can provide an objective evaluation of their health and safety procedures and management competency.鈥�

The NFB is setting up a working group to tackle the issue and to look at how its own safety accreditation scheme can be promoted to the insurance industry.

Companies with good health and safety records should be rewarded

Stephen Ratcliffe, chief executive, Construction Confederation

Stephen Ratcliffe, chief executive of the Construction Confederation, said that he had been working closely with the DTI and the insurance industry to develop a better understanding of the risks being managed in construction.

He said: 鈥淭here needs to be an appreciation and rewarding of the many companies working hard to minimise risks and maintain good health and safety records.鈥�

He added that the confederation was considering setting up a pool or scheme arrangement for member companies to access discounted premium cover.

An insider at one leading insurance firm, however, dismissed the pool scheme as a 鈥渘on-starter鈥� because of the costs involved. He said the idea of a pool would not solve the problem, because the premiums would remain the same and firms would have to pay the same costs.

He added that the cost of setting up the scheme would add an extra burden to contractors, and that long-term problems of employer liability needed be addressed before a scheme was set up.