The cost of insurance is crippling the hotel sector according to Irish Hotels Federation President, Mr Jim Murphy, who addressed delegates at the IHF annual conference in Galway today.

Mr Murphy said that while the Tánaiste had committed to addressing the issue of spiralling insurance costs, the time had come for the Government to introduce practical solutions with tangible benefits for commercial businesses. Mr Murphy added that immediate remedial measures were now needed to counter crippling insurance costs and called on the Government to immediately establish an effective and cost efficient system for setting compensation levels for genuine claims. This should include the putting in place of a book of quotum, which would allow claims to be resolved without recourse to the costly legal system.

"A significant amount of settling a personal injuries claim goes directly towards the legal system and not the claimant. If the Government created a Personal Injures Assessment Board to take the claims settlement procedures out of the costly legal system, then insurance premiums would be reduced dramatically", said Mr Power.

According to the IHF insurance is now a crippling cost to the hotel and guesthouse industry with insurance companies currently quoting renewal premiums between 15-20% higher than 2002. This is on top of hikes of up to 200% over the previous two years.

"The Government also needs to reactivate the Insurance Compensation Fund which was set up at the time of the collapse of PMPA and apply it to settling claims against companies that had been insured with the UK based Independent Insurance Group which collapsed in June 2001. Approximately 30 hotels most of which are small, family owned enterprises are exposed to claims estimated to total ¬10m as a result of this company's collapse", added Mr Murphy.

Irish hotels and guesthouses have suffered from exorbitant increases in insurance premiums over the last three years. The withdrawal of a number of insurance companies from the Irish market and the level of costs associated with claims has also had an adverse impact on premiums.

For further information contact:
Siobhan Molloy / Niamh Boylan
Weber Shandwick FCC
Tel: 01 676 0168 or (086) 817 50 66 / 086 380 9191
Email: nboylan@webershandwick.com