Insurers 'breaking' cover renewal pledge London, May 20 2004, (BusinessEurope.com)
Small businesses remain under the thumb of insurers because they are not given enough notice about policy renewals, an SME group claimed today.
Small firms think they're shelling out too muchAccording to industry guidelines, insurers are required to give at least three weeks' notice to businesses before revising cover premiums, thus allowing bosses time to search for a better quote.
The rule is part of a voluntary code designed to ease pressure on small businesses who are being forced to pay ever higher cover costs.
But the Federation of Small Businesses (FSB) says insurers are not sticking to their promise, and claims one in ten businesses have in the past been given less than one weeks' notice before costs go up.
It was refering to a survey of 1,000 small firms by the group, which also revealed that more than half of respondents were only given two weeks notice.
The FSB says such a brief notice period gives businesses hardly any time to seek out alternative cover - a process which one in four businesses said was either 'difficult' or 'impossible'.
FSB policy chairman John Walker said: "While businesses may have weathered 100% premium increases over the last few years, there is still a significant number of employers who find employers' liability insurance difficult or impossible to secure.
"For these firms in particular it is vital that they get as much notice as possible to allow them to hunt around for affordable cover."
The FSB says it will lobby the Association of British Insurers to enforce the industry's commitment to three-week renewal periods. The group has written to minister for work Jane Kennedy requesting support on the matter.
