SMEs lacking insurance could be at risk
Thousands of UK businesses lack employer’s liability insurance according to a new study, despite it being a basic legal requirement for any firm that employs staff.
According to LV=Broker, 80,000 firms lack this form of insurance and leaves them facing prosecution and fines of up to £2,500 should something happen on their premises.
Despite recent economic growth, the research also discovered that 200,000 SMEs are completely without insurance, equating to one in every 20 businesses.
The UK culture was also found to be particularly arguable when it comes to claims, as 62% of consumers would claim against a business were they to slip or be injured when there.
Given that 75% of SMEs are improving or maintaining their current levels of turnover and that 25% are hiring new staff, the need to be covered is imperative.
Having the correct legal protections is essential should something go wrong, as the potential financial repercussions could be huge.
Thousands are instead leaving themselves vulnerable according to the report, as fines could eat into the bottom line finances of the business.
In instances where funds are already stretched these penalties could spell disaster for firms, as they could be forced to cease trading in the worst instances.
Should finances be a particular issue, seeking insolvency advice is essential to deciding on the best course of action for a company.
Having the correct insurance reduces the likelihood of any issues too, while it can also provide cover against other issues that may cause financial distress, such as flooding or fires.
Such events could prevent trading but one in six small businesses were found to lack a financial back up plan to deal with such an occurrence.
Two in five said they did not see the need for such plans while a fifth said they could not afford to cover themselves.
Opting for the essential insurance plans provides peace of mind for businesses and reduces the likelihood of a financial implications should an individual claim against them.
By Phil Smith