Local firms face insurance crisis

BY EMMA CONNOLLY AND JACKIE KEOGH 

WEST Cork businesses are coming under increased pressure, with some even facing closure, as insurance premiums spiral out of control.

And some firms have not been able to secure any insurance cover at all.

This week alone, three firms voiced their concerns about securing premiums and, in a shock move, The Venue nightclub in O’Donovan’s Hotel in Clonakilty – the town’s only late night venue – announced it is to close on Christmas Day after a 40% hike in its premium. Secondly, the future of the town’s community bike scheme – the only such rural scheme in the country – is also under threat because it can’t get insurance cover.

Meanwhile, in Skibbereen, the owner of The Treehouse indoor play centre, said the future looks very uncertain because of difficulties getting cover due to pending claims. If they cannot get cover, they will be forced to close.

This week the boss of Cork Airport, Niall MacCarthy, lashed out at spiralling insurance pay-outs which, he said, are having an adverse impact on businesses big and small throughout the country, including in the tourism, sports, voluntary and hospitality sectors.

A reduction in services like the bike rental scheme, late-night venues, and facilities for children’s activities, would also have a negative effect on Cork’s attraction as a tourism destination.
Nina Sharif, who set up The Treehouse in Skibbereen five years ago, said she wants to keep her business going in the hope that laws surrounding claims will change – but she fears it won’t happen soon enough.

‘When we started, our insurance was €3,000; then it went to €7,000 and now it’s €20,000. It’s due for renewal at the end of January, but with two cases pending against us, I don’t even know if we’ll get cover. One company is looking at us but if we’ve no insurance, we’ll have to close,’ she said.

Nina, who provides eight jobs at the Treehouse, said the insurance situation was ‘crazy.’

‘The current set-up where people can take claims, in what’s almost like a free lottery, is making it impossible to do business,’ she said.

Clonakilty mayor Michael O’Neill said the closure of The Venue was a major blow to the town which is a popular destination for stags and hens.

The town has already been without a club on Sunday nights for some time and Michael said there was a noticeable drop-off in people socialising on those nights as a result.

‘I feel the insurance issue is a bigger crisis than Brexit – where is it going to stop?’

It’s creating a climate of fear in all aspects of society. The government has to take leadership on this,’ he said.

With Deasy’s of Ring to close on New Year’s Eve, in matters unrelated to insurance, and now a threat to the viability of the bike scheme, there are fears that Clon’s appeal as as a ‘destination’ to visitors may be diminished.

In a strongly worded speech at a recent business breakfast, Niall MacCarthy of Cork Airport called for radical reform in the legal framework surrounding insurance in Ireland to cap the level of awards, particularly in personal injury claims.
Mr MacCarthy, who was speaking to the Association of Chartered Certified Accountants (ACCA), said ‘insurance premiums are not only an impediment for further business investment in Ireland, but are impacting community, sports and voluntary events which are so important to the tourism sector and to the quality of life for local residents.’ Spiralling insurance costs for businesses have been making headlines for months with the government being called on to urgently address the situation. A judicial council is to be established with the ultimate aim of reducing pay outs but there’s no timeline on when reform will happen.