Starting and growing a business? Think about what insurance is needed

The current outlook for British businesses remains positive. Research by LV= Broker reveals that three quarters of SMEs improved or maintained their turnover in 2014, a year during which an estimated 180,000 people started running their own business. P F Spare Insurance Brokers encourages businesses not to recognise that their insurance needs might change as their business grows and develops and, based on the research from LV= Broker, has prepared some recommendations that business owners might like to consider.

Employers’ Liability

As well as increasing turnover, a fifth of SME owners said they had taken on more staff.

By law, all businesses employing staff must have employers’ liability insurance as a minimum otherwise they can be fined up to £2,500 a day by the Health and Safety Executive (HSE). Despite this, the research found that 80,000 SMEs who employ staff have no cover in place, leaving them vulnerable to prosecution and fines.

Pubic Liability

In addition to being vulnerable to fines from the HSE, business owners with premises open to the public or clients could find themselves heavily out of pocket should someone make a liability claim against them. Almost two thirds of consumers say they would make a claim against a small business if they slipped over or were injured while on its premises.

Slips and trips can result in expensive compensation claims running to tens of thousands of pounds. Analysis of LV= data shows that the number of liability claims being made against businesses has been steadily increasing in recent years. P F Spare Insurance Brokers recommends that all businesses put in place appropriate public liability insurance to protect themselves in the event of a claim.

Business Interruption

While the economic outlook is very positive for British SMEs, running a business is not without risk. An unforeseen event, such as a fire or flood, can stop trading for days or even weeks while repairs are undertaken and stock replaced. Depending of the type of business, this can spell financial ruin for companies that are unable to continue trading at alternative premises.
Despite this, one in six SMEs have no financial back-up plan in place if they were unable to trade for any reason and one in twenty SMEs have no Business Interruption insurance (equivalent to over 200,000 companies across the UK).

The insurance needs of a business will vary according to the type of business and the market it operates in, as well as its turnover, stock levels and whether it employs staff. Those running their own business might like to consider seeking independent advice from P F Spare Insurance Brokers to secure the right cover for their business needs.