Branching out and becoming your own boss is a brave thing to do. It's also extremely risky, therefore insurance is essential should anything go wrong, right? Well, you'd think. However, a new study by AXA insurance has found that just 4 in 10 businesses set up in the last three years have any type of cover.
Why Are Start-ups Risking it All?
The research has found that 60% of the new companies surveyed who have employees have no cover for workplace injury or illness amongst their staff. It also revealed that just 41% have employer's liability insurance - a lack of which could result in a business facing a fine of £2,500 for every day they operate uncovered.
Why? Well, despite the Health and Safety Executive reporting that there were 600,000 non-fatal workplace injuries in 2015/2016 and 1.3 million workers suffered from work-related illness during the same period, as well as the risk of fines, those surveyed said they are "too small" or "too young" to have serious risk and need cover.
A further 25% hadn't considered it at all, 8% said it was too expensive and 3% had forgotten to renew their policy.
Gareth Howell, Managing Director at AXA Direct, said:
"The key finding of this survey is that people are operating businesses without insurance because they think they are 'too small' or 'too young' for risk.
"We see no evidence in our claims figures that this is the case: we regularly settle injury claims on behalf of microbusinesses that top the million pound mark.
"Added to that is a significant rise in property damage claims too, as the value of fixtures, fittings and floorings is going up in British properties across the board.
"We anticipate that claims against small firms will increase in value, and they are affecting a wider spectrum of occupations than ever before. Compensation culture has played its role here."
The study also found that freelance workers are at considerable risk as just a quarter of those in the first year of business have an indemnity policy. Although this is not required by law, it is strong recommended.
Do You Have Your Own Business?
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Our dedicated team are just a phone call away and are always happy to share their wealth of knowledge and experience of the commercial insurance industry by answering any questions you may have. Call 0333 202 6240 to compare business insurance today.
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