A Third of SMEs have No Insurance
A total of 30% of small firms have no insurance at all, commercial insurer Premierline Direct has claimed.
The research also revealed that just 16% of small firms -have business interruption cover and only 17% have commercial legal cover.
Association of British Insurers (ABI) spokeswoman Kelly Ostler–Coyle said the results were not surprising, though they were worrying.
“Business leaders are taking cost–cutting measures, but a lack of insurance cover could leave small businesses out of pocket or even out of business,” she said.
“Some people may not be well advised about the different insurances they can take out, but generally a lack of insurance is a business decision – and not a very wise one. Businesses make business decisions every day about what they should spend their money on and insurance can seem like just one extra cost.”
Ostler–Coyle warned that unforeseen events such as last summer’s widespread flooding affected small businesses widely.
“Many could not service their customers or suppliers for weeks or months. Those with proper insurance in place, such as full contents and business interruption cover, would have been protected. Businesses really need to look again at what they should be insured for.”
She added that some business insurance is a legal obligation.
“Employers’ liability is a legal requirement for all employers. All motor vehicles too must be insured. Over and above that people are not required to take out any more insurance – it just makes good business sense.”
Premierline Direct marketing director Kate Aston, warned that many small businesses only think in terms of bricks and mortar when it comes to insurance.
“However, both personal and product liability claims are increasing. If someone makes a claim, the impact on your business can be enormous.”
“Business owners need to have a bigger understanding of all the different areas in the business that they should be insured for. Always speak to an expert,” she advised.