Some under-insured small firms could be breaking the law, insurer warns

The majority of micro-SMEs in the UK are under-insured, new research by AXA suggests.

The study, which polled 365 small businesses in April 2014, found that 53% of those requiring employers’ liability cover by law had failed to buy it.

Of those that did have the cover in place, nearly one in four failed to display a certificate – an offence that can be punishable with a £1,000 fine.

AXA business insurance managing director Darrell Sansom said: “Insurance may feel like one of the little bits of admin that you ought to sort out at some point but not having it can have big consequences.

“Claims for liability can run into millions of pounds and not having cover in place is putting you, your business, your employers, clients and others at risk,” he said.

The study also found that 52% of companies that provide business advice failed to buy professional indemnity (PI) cover.

Only 26% of those who ran their business from home had spoken to their home insurer about cover for their business, while 19% of those who kept their business tools at home had arranged cover for them.

Forty-three per cent of those meeting with clients and suppliers did not have cover against accidents or damage.

Also, only 59% of micro-SMEs that used their car or van for business purposes had bought either a specific commercial policy or added the required business cover to their regular motor insurance policy.

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