Raised insurance rates ‘could force business closures’

BUSINESSES could be forced to close permanently if insurance companies use the flooding crisis as an excuse to raise already high premium rates, it has been claimed.

The Irish Small and Medium Enterprises (ISME) association has warned that despite the problems caused by flood damage in the south and west in recent days, the worst could be yet to come for companies struggling to keep their financial heads above water.

According to ISME, dozens of firms affected by the crisis have already contacted the group raising concerns about how they will be able to afford to restore their properties.

And, association spokesman Jim Curran added, in the event insurance firms use the situation as “an excuse” to raise premiums and “balance out bad investments”, a large minority of companies could be forced to shut their doors permanently due to financial pressures.

“Certainly this has had a devastating impact on us, both in the immediate term and financially in the medium term.

“Businesses have lost thousands of euro because of this.

“We hope the insurance companies won’t use the floods as an opportunity to raise premiums like they have in the past because most companies couldn’t cope,” Mr Curran claimed.

“The insurance companies have made bad investments recently and we wouldn’t be surprised if they used this to get some of that money back.

“They might say it’s not an excuse, it’s just that floods are more likely now, but that won’t help businesses in difficulty that are supplying jobs and helping the local economies.

“What we need to see is assistance from the insurance companies and from government because otherwise companies will go bust,” he added.

The comment was repeated by Val Hanley, president of the Vintners Federation of Ireland, who said the flooding crisis had arrived at “the worst possible time” for his industry.

“I live in Galway and the area has been severely hit, people have lost all of the turnover for last week and probably for next week as well.

“That’s come just after we launched an appeal nationally for pubs and just before the Christmas season.

“There needs to be some sort of fast-tracking of funding to help out these businesses in their hour of need, like there is in England.

“I don’t know if ESB are to blame in Cork, the insurance companies are looking into that, but there is an onus on banks to make loans for damage repair available and for government to intervene with financial help,” he said.

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