A recent survey carried out by Hiscox insurance company, reveals that 30 percent of Small and Medium Enterprises are willing to take risks and only take out minimum insurance cover. SMEs told the insurance company that they only take out minimum insurance against employersâ liability, transport and property.
High risk incidents also remain uninsured, with 57 percent not being insured against the risk of a client not paying. Media and IT sectors took even greater risks, with the figure reaching 71 percent. The next highest risk which remained uninsured was being sued by a customer, with 23 percent of businesses not taking out cover. Stock and building damage remained uninsured by 18 percent of businesses. Surprisingly, although the riots in August had prompted 15 percent of businesses to consider civil unrest a risk to business, it still remained uninsured.
The survey forms part of a report, DNA of an Entrepreneur, with 3000 SMEs being surveyed across six countries. More than half of UK businesses understood the options for insurance available to them, while only 40 percent of businesses in the US, Germany, France, the Netherlands and Spain understood the range of options open to them.
While UK businesses are cutting back on expenditure to reduce costs, it may be seen as a false economy, as some of the greater risks remain uninsured. A small business accountants will deal with risk management, ensuring adequate insurance is in place where it is most necessary. Reducing other costs legitimately will maximise funds available for insurance purposes.