Many SMEs misunderstand their legal insurance obligations and risk breaking the law, a survey by Aviva has found.
Less than a third (29%) of the 1,500 surveyed businesses were confident that they had the right business insurance, while 12% admitted to having no cover at all.
Some businesses were unaware of their responsibilities for buying employers’ liability insurance, a legal requirement that provides cover in the event of an employee making a claim for a job-related illness or injury.
Failure to comply with this law could result in daily fines of £2,500.
The survey found:
- 11% of firms didn’t know that employers’ liability insurance is a legal necessity when employing staff
- 25% thought it was only needed when a business have 2 or more employees
- 87% didn’t know that the minimum legal requirement for employers’ liability insurance is £5 million
- 19% thought the minimum cover is less than £500,000.
Angus Eaton, managing director of commercial lines at Aviva, said:
“Clearly SMEs need a strong understanding of their legal obligations and how they can protect their business and employees to keep it trading – one claim without adequate cover could easily be enough to put severe financial pressure on an organisation or even close it down completely.”
We can help you understand your legal obligations. Contact us today.
