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22/02/2005
Government relaxes insurance rules for small firms
Companies employing only their owner will not have to buy employers' liability compulsory insurance (ELCI) from Monday, February 28, when new rules come into force.
Minister for Work Jane Kennedy said: "Hundreds of thousands of limited companies, where the owner is the sole employee, will benefit from the new rules. Removing the requirement to purchase ELCI could save companies hundreds of pounds each year."
It is estimated there are around 300,000 small companies that will be able to take advantage of the rule change, which was made following a wide-ranging consultation on whether to remove the requirement. The change was announced in October last year.
The Government is committed to supporting a package of measures that, with the support of stakeholders, will have a cumulative positive effect on the ELCI market.
Ms Kennedy said: "From Monday, many small businesses whose owners have told us they cannot afford to buy this compulsory insurance will no longer need to purchase it. This is good for businesses across the country."
The Association of British Insurers estimates that the average saving for each company might amount to around £250 a year.
Ms Kennedy added that last year's consultation had given everyone the chance to have their say on the insurance, with the Government listening to their views.
"The consultation sought the views of employers, insurers and their representative bodies and other stakeholders on the proposal, with nearly 80 per cent of respondents agreeing the requirement should be dropped.
"This change will bring small companies who have a single employee who owns the company into line with similar unincorporated businesses," said Ms Kennedy.
(SP)
Minister for Work Jane Kennedy said: "Hundreds of thousands of limited companies, where the owner is the sole employee, will benefit from the new rules. Removing the requirement to purchase ELCI could save companies hundreds of pounds each year."
It is estimated there are around 300,000 small companies that will be able to take advantage of the rule change, which was made following a wide-ranging consultation on whether to remove the requirement. The change was announced in October last year.
The Government is committed to supporting a package of measures that, with the support of stakeholders, will have a cumulative positive effect on the ELCI market.
Ms Kennedy said: "From Monday, many small businesses whose owners have told us they cannot afford to buy this compulsory insurance will no longer need to purchase it. This is good for businesses across the country."
The Association of British Insurers estimates that the average saving for each company might amount to around £250 a year.
Ms Kennedy added that last year's consultation had given everyone the chance to have their say on the insurance, with the Government listening to their views.
"The consultation sought the views of employers, insurers and their representative bodies and other stakeholders on the proposal, with nearly 80 per cent of respondents agreeing the requirement should be dropped.
"This change will bring small companies who have a single employee who owns the company into line with similar unincorporated businesses," said Ms Kennedy.
(SP)
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