Northern insurance broker Smart and Cook has urged the government to make changes to the EL market when it investigates the sector next year.
The broker urged the government to "resolve the crisis" and blamed the "compensation culture" for the current liability crisis, which has left many firms without insurance.
A recent Axa report found that around 16,000 UK firms are operating without any insurance.
Peter Castle, Broking Director at Smart and Cook, said: "We welcome the move by the Office of Fair Trading, launching a long-overdue independent investigation into the problems within the UK liability insurance market.
"We hope this will not only identify the root of the problems, but also help bring about changes to resolve the crisis and ease the situation for small businesses which can not afford cover and are either risking major problems for themselves and their employees or are simply going out of business."
