Increases in the tax on insurance policies is leaving public sector and voluntary organisations exposed to higher risk, a leading insurer has warned.
Zurich Municipal says one in five organisations have reduced their cover as a result of insurance premium tax being doubled to 12% compared with two years ago while more than 10% have stopped insuring some risks altogether.
In the run up to tomorrow's Budget, the company says the Government should commit to no further increases in IPT in this Parliament and carry out a 'full scale review' of the tax.
It says the tax increase is putting public sector finances under threat because of higher costs from claims.
A survey found that a third (32%) of organisations had increased their excesses – the amount they pay towards the cost of claims – to offset successive rises in IPT.
Zurich Municipal managing director Andrew Jepp said: 'Unsustainable rises in IPT are putting pressure on the budgets of public and voluntary sector organisations.
'This threatens to divert money away from vital frontline services and will hit the poorest and most vulnerable the hardest.'
