A small business owner in rural Ireland has warned he may be forced to close after the cost of insurance has increased from €7,000 to €30,000 in a single year.
Martin Mulligan and his wife Mary have operated Mulligan's service station on the Roscommon Road in Athlone for the last 40 years.
The business, a Circle K franchise which employs 16 people, also includes a Londis grocery store, a deli counter and a post office.
Mr Mulligan said he went through a broker and the quote from the insurance company was the “only quote I could get”.
In addition to the price hike, the excess he has to pay has increased from €1,000 to €25,000.
Mr Mulligan said he will now have to put aside €55,000 per year to cover insurance.
“Due to the lack of real competition in the market, we have not been to obtain alterative insurance cover and we have received little meaningful justification for the increased year-on-year premium,” Mr Mulligan said.
He said the spike in premiums could be due to two claims having been lodged against Mulligan’s for slips and trips. However, he said he had no information about either alleged incident and repeated requests for documentation from the solicitors involved had failed.
“The claimants’ solicitors won’t actually respond saying what they are claiming for. This is the problem. We don’t know anything about these claims,” he said.
“We are entirely at the mercy of non-controllable claims lodged against us. Even where we feel these claims are spurious, they are still used by the insurer as a basis for increasing premia over time.”
He said a claim against Mulligan’s was settled for €17,000 eight years ago by the insurance company. However, he said there was no substantial rise in his premiums after that pay-out.
Mr Mulligan said he was shocked when he received the latest quote a couple of weeks ago and is reviewing the viability of his business.
“Where is the money going to come from? “ he asked. “My business is now at a high risk of closing. Over the summer, I’m going to have to take a long, hard look at it and it’s not looking good.
“I work seven days a week from 7am to 11pm and nobody says, ‘Stop you’ve got enough done’.
“If there is going to be a deficit at the end of the year, there is no point in continuing.”
Mr Mulligan said his business was facing a triple-whammy. Along with the insurance hike, there has been a rate increase following a re-evaluation and his post office business has taken a “massive cut” due to changes in his contract.
He accused insurance companies of applying “substantial and - in some cases - punitive year-on-year increases in the premia which they are seeking to extract from the small business sector in Ireland”.
He said premiums are reaching such levels that they are resulting in the closure of businesses, the loss of jobs and a loss of tax revenues to the Exchequer.
He believed the Government was doing nothing about the escalating costs of claims, despite years of campaigning by people like Supermac’s owner Pat McDonagh, who has consistently raised the high cost of insurance to small businesses.
“Our situation is not unique; the above scenario is replicated across Ireland. It is hard to imagine another area of business where this could occur without a public out-cry,” Mr Mulligan said.
“There are few, if any, businesses in Ireland which can absorb a non-justified fourfold increase in the cost of insurance without a knock-on impact elsewhere in the business.
“In our case, at the very least, we are likely to be forced to reduce our staff levels and we are giving serious consideration to closing our business. It is not only this year’s premium hike but also the prospect of an uncontrolled hike in future years which we have to consider.”
