Leading insurer suggests businesses are gambling with their financial futures by not purchasing the necessary cover
Figures released by AXA Business Insurance indicate that businesses are underestimating the risks they’re exposed to, with many failing to purchase insurance they’re legally obliged to have in place.
Running a business comes with its fair share of challenges, and budgeting for the future is one of them.
It’s a tough balancing act that can ultimately determine whether or not you achieve your goals – and new figures from AXA Business Insurance suggest that many firms are taking big risks in search of stability.
According to the report, businesses are gambling with their finances by failing to purchase vital insurance policies – with some even neglecting to buy cover that they’re legally required to have in place.
The most startling figure is that, among the small businesses in Britain that are obliged to purchase employers liability insurance, 53% have failed to do so.
AXA figures show that 53% of small businesses that are legally required to purchase employers' liability insurance have failed to do so.
This oversight – whether it’s intentional or not – leaves those firms exposed to a fine that can be as high as £2,500 for each day the cover isn’t in place. When you consider that AXA’s report also shows that 26% of small businesses have less than £1,000 in savings, that’s a fine many SMEs could struggle to pay.
And it’s not just regulatory requirements that firms are missing. AXA says that 43% of businesses that regularly interact with the public are still not covered by public liability insurance. While there may not be any legal consequences to fear in this field, the financial risk is always there – especially in a climate where the compensation culture continues to grow.
Unfortunately, there’s one thing the report doesn’t make clear – what is the reason behind the figures? Is it a lack of awareness among business owners, or rather a willingness to gamble with their own finances?
Regardless of the explanation, what’s important is to ensure small firms understand the rules governing insurance – as well as the benefits of investing in a policy that could provide vital financial assistance.
By helping small businesses get the right cover, by improving their knowledge of insurance and by making it easy for them to purchase the policies they need, it’s possible to ensure Britain’s firms aren’t leaving themselves unnecessarily exposed to costs that could compromise their future.
Dan O’Sullivan is Make It Cheaper's Web Content Manager, which means much of his time is dedicated to ensuring we have plenty of online material to help business owners understand the energy, insurance and telecoms industries. With years of experience working alongside SMEs, Dan is committed to making life as easy as possible for smaller firms. You can email Dan at firstname.lastname@example.org