Businesses up and down the country are struggling to contain soaring road freight insurance costs and according to the latest findings from the Freight Transport Association's Quarterly Transport Activity Survey, this isn't a trend we will soon be seeing the back of.
Respondents to the survey reported average increases of around 10 per cent in goods vehicle and goods in transit insurance and increases of around 13 per cent in employer and public liability insurance.
The prospects for 2004 are of continued but slightly lower increases in premiums, on average around seven per cent for all types of insurance. However this remains over double the rate of inflation.
FTA's recent Pre-Budget Submission statement called for the Chancellor to remove or at the very least, reduce Insurance Premium Tax from all forms of insurance faced by businesses to offset in part the premium rises that have had to be paid.
FTA's chief economist Simon Chapman said: “Industry's management of risk has shifted in response to significant rises in premiums in recent years. Management focus is now on progressively reducing exposure to risk and using insurance as a long stop rather a first course of action. The sector has an increasingly strong culture of safety for its staff, the loads it carries and for other road users. Rigorous driver training schemes such as FTA/TDG Five Star, industry codes of Practice such as Well Driven? and targeted campaigns raising industry awareness on issues such as driver fatigue have all contributed to this.
“Nonetheless businesses must protect themselves in an increasingly litigious environment. Rather than encouraging operators to take out appropriate and sufficient insurance to cover their activities, government is cashing in on an Insurance Premium Tax windfall, where receipts have risen in line with premiums. Insurance Premium Tax is an anachronism to the government's desire to transfer the burden of taxation from 'goods' to 'bads' and it should be scrapped or reduced for business insurance in order to take the heat out of rising costs.”
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