Over half of new business owners trading without any kind of insurance cover
A growing number of new founders are operating without financial protection, according to new research, with just four in ten having any kind of insurance cover.
The study, by insurance firm AXA, asked founders of firms started in the last three years where they were protected, and found a majority believed they were too small? to need any insurance cover.
Worryingly, 59 per cent of respondents with staff members had risked running their business without employers? liability insurance the most serious gap in protection.
Required by law, employers? liability insurance covers workplace injuries and illness, and business owners not covered can incur substantial non-compliance penalties of up to 2, 500 for each day without it.
According to the survey’s findings, it wasnt tight profit margins pushing new founders to avoid covering their business, but an under-appreciation of risk.
Almost three-quarters of those operating without protection believed their business was too small to be at risk, while a quarter hadnt considered it at all. Just eight per cent claimed they were avoiding the costs of insurance cover.
Commenting on the study, Gareth Howell, managing director at AXA Direct, gave a warning to micro owners who felt secure without insurance cover.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
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