BUSINESSES in Ireland are being “paralysed” by insurance premiums due to high personal injury claim awards, according to the boss of Cork Airport.
Managing Director at Cork Airport Niall MacCarthy has called for radical reform in the legal framework surrounding insurance in Ireland to cap the level of awards, which he said are having an adverse impact on businesses in the tourism, sports, voluntary and hospitality sectors.
Speaking at the Association of Chartered Certified Accountants (ACCA) Business Leaders’ Breakfast in Cork, he said: “Businesses in Ireland are becoming paralysed by the risk of premium hikes from a legal system which has some of the highest pay-outs in Europe and is at complete odds with our European competitors.
“I know from my involvement in tourism that this is having a direct impact on many businesses and their ability to expand and grow as well as having knock-on effects on the price point that companies are charging the public for their products and services. Every claim ultimately affects the selling price of the underlying product or service and drives up the cost of living in Ireland.”
Mr MacCarthy added that accountants and finance professionals are in an informed position to influence and advocate for change.
“You can get a cup of coffee for €1.50 in Spain, that same cup costs €3 in Ireland and part of that differential is down to overheads such as insurance premiums which are directly affected by the disproportionate size of awards here,” said Mr MacCarthy.
Head of ACCA Ireland, Caitriona Allis added: “ACCA welcomes the government’s recognition of the challenges within the insurance industry and its request of the Law Reform Commission to undertake a detailed analysis on the capping of damages that a court may award. Premiums are negatively affecting businesses' ability to innovate and invest and this needs to be reformed to ensure Ireland stays in line with the insurance industries of other leading European countries.”