Mitigate Your Risks Through Insurance
Are you a small business facing big risks? Gary Head of specialist insurer, Hiscox, explains how to mitigate your risks through insurance.
Owning your own business can be a stressful thing at the best of times.
Aside from the trials and tribulations of simply running the business on a daily basis, there is the wider issue of the external environment that businesses operate in. This marketplace can be characterised by increasingly complex levels of risk exposure, for businesses of all sizes.
Some of the statistics are quite stark. There are 4.3 million small businesses in the UK and last year 56% of them settled employment disputes out of court. Small business owners spend 28 hours a month filling in forms for government and according to the business department’s small business survey, 31% of all businesses believe that regulations are obstacles to their success.
The environment for UK companies and directors has become increasingly complex – increased legislation and regulation has led to a greater chance of litigation for companies. Directors, officers and employees, regardless of size and nature of business, may face claims from a wide range of sources including shareholders and investors, employees, regulatory bodies, customers, suppliers, creditors and competitors.
The future could be viewed as even more onerous for companies and directors. Legislation such as the Companies Act 2006 (formerly the Company Law Reform Act) includes a statutory statement specifically on directors’ duties and makes the law in this area much more accessible to potential claimants. Other legislation includes tougher employment and corporate manslaughter laws, as well as proposed laws protecting working mothers’ rights and the environment.
The costs of even a successful defence can be extremely substantial, and recovery of costs is invariably difficult and often not financially viable. Can your balance sheet afford to be exposed in such a way?
This situation has led to a genuine need for financial protection for UK SMEs. Insurance might not sound sexy, but it could be just the thing to save your business from going bankrupt as a result of a dispute.