Small businesses are facing an insurance cost crisis, according to the Small Firms Association, with a 29.6 per cent increase in costs since 2011, and a particularly sharp rise in the past year.

“Ireland’s compo culture has been allowed to get out of control in recent years,” said to SFA president AJ Noonan. He said that the Central Bank has tracked a rise in the frequency of claims and an increase in the average cost per claim of 8 per cent in private motor insurance, 27 per cent in employer liability and 8 per cent in public liability.

The first step must be an overhaul of the Book of Quantum, which outlines the appropriate payments for various claims, said Mr Noonan. “Ireland has the highest whiplash payout in Europe of €15,000. Small businesses are paying over the odds for insurance compared with other European countries. The significant cost increases being borne by small business is resulting in job losses and non-expansion by companies.”