The Department for Work and Pensions (DWP) is to issue a consultation paper on excluding more than 300,000 sole trading companies from the need to purchase employers' liability insurance.
According to a report, a government source claimed the initiative had almost universal support.
He said: “Everyone sees it as a logical progression. Requiring people to insure against their own negligence is clearly a bit of a loophole.”
Minister for Work Des Brown floated the idea in December 2003, said the report, after the DWP issued its report on the state of the compulsory insurance market.
Since then the civil service has been working with the insurance industry, business groups and trade unions to assess the viability of the idea.
Other initiatives presently under consideration include one by the Health and Safety Executive (HSE) to establish a risk index for both large and small companies, said the report.
It said the small companies index could allow firms to first assess their own risk profile in a manner acceptable to the HSE and insurers, rather than having to employ separate external accreditors.
“It is part of trying to make premiums more risk-based, rather than rating a book rate based on the claims record of the sector as a whole,” said the government source.
