INSURANCE companies are forcing manufacturing companies to the wall by refusing to give them the vital cover they need to do business, a report has revealed.

One in ten manufacturers and one in 12 other businesses have been refused employers' and public liability insurance in the region this year.

A British Chambers of Commerce survey of the regions revealed companies faced astronomical rises in the premiums for the most basic cover.

The chambers want an assurance from the Government and the Association of British Insurers that businesses will not have to shoulder similar increases next year and beyond.

They are also seeking advice and help to business now so they can plan and, if possible, budget for further increases in good time. The body also wants a competition investigation into the refusal of some insurance companies to write cover for good risks.

Martin Hathaway, chief executive of Yorkshire and Humber Chambers of Commerce, said: "This survey highlights the severity of this problem.

"The insurance industry is putting this region out of business by refusing cover and increasing insurance premiums to totally unrealistic levels. We will be lobbying the Government hard to put an end to this.

"The issue of soaring insurance premiums has been raised by our membership with increasing urgency."

Mr Hathaway said that chambers do not object to insurers offering cover that reflects the risk rating of different industries, taking into account the level of claims having to be met and the claim history of the company concerned and its sector.

"They also accept that insurers must also seek a reasonable rate of return.

He said: "However, we expect the rate of return to be limited by effective competition. We do not expect losses in unrelated forms of insurance, or other sectors of industry to be recouped through increases in premiums for this insurance. Past losses are only relevant in so far as they relate to this specific insurance and the characteristics of the company seeking insurance.

"Too many of the cases that come to us from our members suggest premium increases wholly disproportionate to the risk, unrelated to the claims history of the company concerned, or where there appears to be a refusal to supply cover which is followed by other industry syndicates.