Irish hotels and guesthouses will be forced to close down if the cost of insurance continues to rise, the industry warned today.
The Irish Hotels' Federation (IHF) said a survey of more than 900 establishments showed the average insurance premium rose by 351 per cent between 2000 and 2003.
It said "radical reform is urgently needed", adding it would raise the issue in a submission to the Joint Oireachtas Committee on Enterprise & Small Business this week.
The IHF's submission will forward four core issues that it says result in higher insurance costs in Ireland.
There is insufficient competition in the market, fraudulent and exaggerated claims are an endemic problem, legal and professional fees are unnecessarily high, and Ireland has higher compensation costs than all other European countries where benchmarking provides standardisation of awards, the IHF says.
"Despite widespread concern on the rising costs of insurance and uniformity of view that radical reform is needed, it is unacceptable that no action has occurred to improve the situation," IHF President Mr Jim Murphy said.
"Given that insurance, local authority rates, the tax regime and staff costs have all seen major increases in the last number of years these are seriously eroding and in many cases putting hotel and guesthouse businesses into serious loss-making situations.
"We also strongly believe that a criminal charge of insurance fraud should also be introduced and resources for its enforcement be made available. This would reduce the number of spurious claims.
"Doing nothing effective, immediately, is fiddling while businesses go to the wall," Mr Murphy said.
The IHF has also called for the setting up of the Personal Injuries Assessment Board but warned it would be a "white elephant" if its remit is not extended to include public liability cases.
