The Construction Industry Federation, the trade body for Irish contractors, is pushing its government to take the matter to the European Commission. It is expected to demand changes to the European insurance regulations, in order to protect CIF members against anticipated losses. The CIF believes that the losses breach EU regulations for the single market, and hopes that any changes would enable the contractors to recoup some of their losses.
The firms took out their insurance through an Irish branch of UK firm Independent Insurance, which means that they are subject to UK regulations. These state that non-UK companies are not eligible for compensation from the Policyholders Protection Board.
The CIF, together with the Small Firms Association and the Irish Business and Employers Confederation, is arguing that this breaches EU rules intended to ensure that firms within the single market compete on equal terms.
Irish construction firms – which form nearly one-third of the 600 Irish firms affected by Independent's collapse – have taken up alternative insurance cover. The cost of these policies has been up to twice that of those they held with Independent.
The collapse raised issues about the regulation of the insurance market at the level of the EU
The Irish Construction Industry Federation
A spokesperson for the CIF said the European Commission should issue a directive to ensure that the problem does not recur. He said: "Measures need to be put in place at an Irish and European level."
The Irish government is putting the concerns of the CIF to the UK authorities, but the federation believes that this may not be enough. The CIF spokesperson said: "The collapse raised issues about the regulation of the insurance market at the level of the EU."
The CIF is campaigning for compensation from the Irish government to offset the problem, but it is only seeking funds worth £15.5m – the surplus remaining from a government fund set up in a prior economic crisis. Analysts estimate that the potential claims from Independent's collapse could reach £80m across all industries in Ireland.