WA62

'Breakthrough' on employers' liability for small companies

Jane Kennedy, Minister for Work, has announced that with effect from early 2005, companies in which the owner is the sole employee will no longer be obliged to purchase employers' liability compulsory insurance (ELCI).

The measure is expected to save sole trading companies an average of £250 a year, and will affect around 300,000 companies in the UK.

The announcement follows a consultation in which nearly 80% of respondents said that the requirement should be dropped.

Business groups have urged the Government to take further action to tackle the ELCI crisis.

The spiralling cost of ELCI insurance premiums, many of which increased by around 50% in 2002 and a further 20% in 2003, has left many firms struggling to cope.

Nick Goulding of the Forum of Private Business also warned that some sectors find it hard to obtain the necessary insurance.

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