Representatives of small businesses have appeared before the Oireachtas Finance Committee to highlight the difficulties in securing public liability insurance amid a climate of spiralling costs.

Last week, two children's play centres in Dublin and Carlow closed their doors citing a 300% rise in their public liability insurance costs.

Many more businesses in the sector say they too are at risk of closure, because they either cannot afford the insurance renewal quotes being offered, or cannot even secure a quote.

The owner of a children's play centre in Navan, Co Meath, told the committee she will be forced out of business within weeks, because she has not been able to get her premises insured.

Linda Murray, of Huckleberrys Den, said her premium has risen by 1,040% over the past six years.

She said she is no longer able to get her premises insured, and now has just 25 days before her current policy expires.

In an emotional submission, Ms Murray said she has had two claims against her in the past five years.

She said she is currently being "sued for anxiety" after a child banged his head in her play centre and is "no longer able to play with his friends, to go to a play centre or play in playgrounds".

Ms Murray said the "reserve on this is €23,000, even though the child didn't suffer any injury". She said this was the only reason she was unable to get insurance.

She said her play centre was now the only one in Navan, after another facility closed six weeks ago.

FBD Insurance chief claims officer, Jackie McMahon, told the committee that an estimated 20% of claims submitted to the insurer were fraudulent.

Of these, he said, only about half were "exposed as fraud".

Mr McMahon said most of these claims were "staged accidents".

He said a "huge amount of effort and resources" were used to investigate fraudulent claims, adding that the "bar to prove fraud was very high".

Mr McMahon also said that about 80% of claims were in relation to soft-tissue injuries.


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ISME is calling for the reform of the insurance industry to be "personally led by a Cabinet minister" and preferably Minister for Justice Charlie Flanagan.

The organisation's chief executive, Neil McDonnell, told the committee that the process of reform had stalled, and that people were "losing jobs and businesses because of legislative inaction".

He said there was a "complete absence of material reform" in the industry.

Mr McDonnell said rising insurance costs were now restricting the conduct of sport and charitable activities and "attracting criminal activity", as well as reducing the "physical and moral health of citizens".

He said it was now "socially acceptable" to "sue someone for the most minor of inconveniences". 

In its formal submission to the committee, ISME accused the legal system and judiciary of being "unjustly pro-plaintiff", and in need of immediate reform. 

It said legal costs represented a "significant component" of the costs of insurance. The submission states that the "extravagant size" of awards in minor injuries cases - as well as what it calls the "non-existent investigation of fraudulent claims" - has created a "massive incentive for fraud". 

It says legislation introduced in 2015 had failed to reduce legal costs. 

ISME said general damages are now too high and need to be capped by law, adding that there is, in its view, no constitutional impediment to doing so.

It said the only reforms currently taking place were "administrative in nature" and would not materially reduce the cost of insurance. It added that there was currently less information available on the insurance industry than there had been five years ago. 

ISME is also concerned about a shortage of underwriters in the industry, and about "possible collusive or cartel-like behaviour" among some insurance companies. 

The message from the Alliance for Insurance Reform is that spiralling insurance costs are crippling small businesses and forcing many of them to close.

Spokesperson Peter Boland told the committee that firms were "closing on a weekly basis" due to "savage increases in liability insurance renewals".

Mr Boland criticised what he called the "frustratingly slow" pace of reform, and said the crisis was spreading to a broader range of SME sectors, including nursing homes, travel agents and retailers. 

He said he believed gardaí were not equipped to deal with insurance fraud and exaggerated claims.

Mr Boland welcomed legislation passed by the Seanad earlier this week, aimed at capping the level of insurance pay outs for personal injuries claims. But he said the bill would "die a slow death" without political support. 

Speaking in the Dáil, Tánaiste Simon Coveney said the Government needs to take action in "the short term", but said it is not true it has been "dilly dallying in relation to this issue".

He was responding to Sinn Féin's finance spokesperson Pearse Doherty, who claimed the Government had "dithered and dallied" on the issue all the while the clock is ticking in relation to the future of soft play centres and their staff.