Small Firms at Risk Due to Lack of Business Insurance
Many small enterprises do not have key insurance policies, with over half of business leaders unaware of the importance of protecting staff
Small and medium businesses could be at risk as a new survey by YouGov has revealed that the majority are operating without necessary insurance due to widespread “insurance ignorance” amongst business leaders.
More than half (55%) of business owners said they did not have ‘Partner’ (shareholder) insurance and 30% admitted they had never heard of it. Another 24% admitted to not being aware of ‘Business Loan’ insurance and only 8% said they had it in place.
The report, produced in conjunction with Royal London, found that small businesses are unaware of the need to protect their staff as well as goods and assets.
59% of business owners said that having stock and equipment covered was essential, compared to just 40% who said ‘key person’ insurance was important. However, 77% of firms said their businesses would be massively impacted if a vital employee was unable to work for more than six months, with 31% saying it would impact them “severely”.
Debbie Kennedy, head of proposition for Royal London’s intermediary division, added:
“We’re concerned to discover how awareness of business protection varies so widely among small and medium enterprises – many are woefully under-protected and uninformed about their options. For example, we found they are protecting their stock and equipment, but not factoring in cover for their key personnel.
“Running a business is relentless; when there are hundreds of priorities it can be hard to know what needs to be insured and what doesn’t. We urge to make time to understand the options, so they can put the right cover in place – to effectively safeguard their business.”