Rising cost of insurance to be scrutinised

The government has given its strongest indication to date that it is ready to take action to tackle the soaring insurance premiums that are crippling some sectors of the construction industry.

Trade and industry minister Alan Johnson said last week that the government was "looking to maximise the benefits of existing initiatives and consider faster and more cost-effective dispute resolution agreements to curb costs".

Recent estimates put the rise in claimants' costs, legal fees and medical assessments of injuries at 50% more than for the previous three years.

However, Johnson ruled out government help to cut insurance premiums to ease the burden on small businesses.

Johnson's admission that something must be done will come as a welcome relief to the industry after reports by the Office of Fair Trading and the Department for Works and Pensions into liability insurance were accused of 'missing the mark' (CJ 11 June).

The problem which will be highlighted by the Federation of Small Businesses when it unveils its members survey on the impact of insurance later this month.