One in 20 SMEs have no insurance » SMEInsider

One in 20 SMEs have no insurance

80,000 small businesses in the UK do not have employer’s liability insurance, despite this being a basic legal requirement for companies that employ staff.

Research by LV= Broker found that 200,000 small and medium-sized businesses in the UK are completely without insurance, despite improved growth.

This omission leaves employers open to prosecution and fines of up to £2,500 per day. What’s more, UK culture is notoriously litigious, with 62% of consumers saying they would make a claim against a small business if they slipped over or were injured on the premises, according to the report.

With 75% of SMEs improving or maintaining their turnover this year and 25% taking on more staff or hiring for the first time, making sure that they have the right legal protections in place should be an essential next step.

Mike Crane, commercial lines director at LV= Broker, said: “SMEs are the lifeblood of the British economy and it’s great to see that so many have increased their turnover in the past year and taken on more staff. However the research shows that thousands are leaving themselves vulnerable to prosecutions and fines 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.”

LV= also found that one in six small businesses have neglected to put a financial backup plan in place to cope with temporary crises such as fires or floods, which can force businesses to close for a period of time. Two in five businesses stated that they “didn’t see the need” for a contingency plan, while 21% said that they couldn’t afford one.