Large payouts may be justified when a significant injury is involved and where a business is negligent or reckless. However, all too often, the payouts are awarded against a business without establishing their negligence or recklessness.
The plan contained 66 measures which, it was hoped, would lead to greater competition in the insurance market and lower premiums for customers and businesses. So far, that plan has for the most part delivered for motor insurance consumers, but has been less effective in driving down business insurance claims costs.
The insurance that puts most financial strain on businesses is public liability and employer liability cover. PL insurance covers the business in the event that a member of the public becomes injured on the premises; EL provides cover in the event that an employee is injured while working for the company.
Recently, a Dáil question was put to then minister for finance Paschal Donohoe asking him to explain why the Action Plan for Insurance Reform had been so successful in reducing motor insurance premiums while premiums for business insurance, such as EL and PL, continue to rise.