Business: Small Firms Under-insured

The results revealed that millions of firms do not have compulsory Employers’ Liability Cover in place, a policy that UK bosses are legally obliged to have even for voluntary members of staff. Furthermore, over half of small businesses are under-insured for the commercial activity they undertake, leaving them exposed to financial losses and lawsuits, which could place their future at risk.

“The recent summer floods have resulted in £3 billion of claims from 50,000 businesses,” comments Neale Phillips, head of insurance at British Gas Business. “Events such as these can interrupt trade for weeks, but inadequate insurance could spell the end of any small organisation. The financial implications of not having compulsory policies in place are also astronomical. I urge all small firms to check their insurance requirements today.”

The research also showed that over half of these firms want to purchase their business insurance over the internet, but until now there has not been a bespoke service that meets their diverse requirements and only 15% of SMEs currently buy online.

“Unlike the personal insurance market where internet searching has been truly embraced as it keeps the customer firmly in control, this simply hasn’t happened in the business insurance market,” comments Mr Phillips. “Until now, small firms have been reliant on finding and trusting a reliable broker, but the high levels of under-insurance indicate that this traditional model alone is no longer viable.

“Brokers don’t have the capacity to shop around on behalf of their smaller customers and are very often less focused on that end of the market. A dedicated online business insurance comparison service will put small firms back in control of their policy requirements.”

In response to this need, British Gas Business has launched a dedicated online insurance comparison service for small firms: Insurance-for-Business (ww.insurance-for-business.co.uk).