An estimated 80,000 SMEs in the UK are winging it and breaking the law by not having any business insurance in place, according to new research by LV=Broker.
Despite 75% of small and medium businesses in Britain managing to maintain or increase their turnover in the past year, and the emergence of another 180,000 start-ups, many companies are risking financial difficulties and even ruin by not preparing for a rainy day.
These statistics reflect firms with one or more members of staff that are required by law to have a policy in place including employers’ liability insurance. Uninsured businesses are liable to be fined up to £2,500 per day by the Health and Safety Executive (HSE).
Mike Crane, Commercial Lines Director at LV= Broker, said: “The research shows that thousands are leaving themselves vulnerable to prosecutions and fines by the HSE for not having appropriate insurance in place.
“Getting the right advice on cover from a specialist insurance broker is invaluable for business owners and can make the difference between being able to continue trading or not should the worst happen.”
Small businesses without a backup plan
More than 200,000 new members of staff were taken on by SMEs in the UK over the past 12 months, along with a 4% increase in firms employing for the first time. Yet tens of thousands are either knowingly or unknowingly failing to adhere to basic legal requirements regarding insurance. Besides the law aspect, business owners are putting their livelihoods at risk.
Without a solid small business insurance package, public-facing ventures such as shops, pubs, restaurants and professional services wouldn’t be equipped to handle claims made against them should members of the public file claims for compensation after being injured while on the premises. The latest statistics suggest that around 62% of consumers wouldn’t hesitate in making a claim against a small business if they were injured while on site.
Besides taking a risk by not being insured, 15% of SMEs don’t have any kind of financial plan to fall back on should the unforeseeable occur. Reasons given include not being able to afford it and wanting to put any profits straight back into the business rather than planning for the what-ifs.
If you run a small business without insurance or are a budding entrepreneur about to launch a start-up, get in touch with an expert consultant at The Insurance Octopus today to find the best cover tailored to your needs.