One-third of start-ups uninsured
Businesses putting ‘employees and customers’ at risk, says survey
Time-consuming forms and red tape mean almost a third of start-up businesses are operating without business insurance, research has found.
Businesses operating without Employers’ Liability insurance could be putting themselves at risk of fines of up to £2,500 a day if they employ temporary workers or sub-contractors, the survey by insurance website Insurantz.com warned.
However, almost three quarters of start-ups said a good website, a memorable company name and attractive marketing materials were more important than their business insurance.
Nearly half of home-workers and new media consultants are operating without insurance, with a third of the same group admitting to having little or no idea of what their policy covers.
The organisation said the failure to adequately insure can be linked to the red tape which causes small businesses to spend ‘hours each week’ filling in forms.
A third of respondents said they had found arranging business insurance ‘too time consuming and overly complicated’, which may have led to it being pushed lower in some people’s priorities.
George Derbyshire, chief executive of the National Federation of Enterprise Agencies (NFEA), said the results of the survey were shocking.
“Running a business is all about risk-taking, but we would always advocate a managed and informal approach to risk.
“Sensible entrepreneurs discuss the issues with their advisers in the knowledge that getting this wrong can be disastrous in human, financial and legal terms,” he said.
© Crimson Business Ltd. 2008