New research by LV= Broker reveals that 75% of SMEs improved or maintained their turnover in the past year.
41% of British SMEs have seen their turnover increase in the past 12 months, while a further 34% say turnover remained steady at 2013 levels. Meanwhile, 180,000 people started running their own business over the past year.
As well as increasing turnover, SME owners have also created more jobs. 21% of SME owners say they have taken on more staff in the past year and 4% have employed people for the first time – equating to over 200,000 new jobs.
By law, all businesses employing staff must have employers’ liability (EL) 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.
In addition, 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. 62% 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 and SME owners need to be prepared for them.
15% of SMEs have no financial back-up plan in place if they were unable to trade for any reason and 4% of SMEs have no insurance, equivalent to over 200,000 companies across the UK. When asked why, 38% of these don’t see the need for any contingency plan, 21% can’t afford one and 10% say they plough all their profits back into the business.
Mike Crane, commercial lines director at LV= Broker, said: “SMEs are the lifeblood of the British economy and it is great to see that so many have increased their turnover in the past year and taken on more staff. The research shows that thousands are leaving themselves vulnerable to prosecutions and fines by the HSE for not having appropriate insurance in place.
“Getting the right advice on cover from a specialist insurance broker is invaluable for business owners and can make the difference between being able continue trading or not should the worst happen.”