Steep hikes in insurance premiums continue to be a major cause of concern for the UKís small and medium sized businesses, with many firms still finding it difficult to find cover at all and others struggling to survive. Thatís the finding of the latest research from leading business finance provider, Bibby Financial Services.
According to the research, a significant 94% of small and medium sized businesses are worried that employerís liability insurance premiums will rise again this year raising fears that many small firms will be put out of business.
In fact, almost half (46%) of owners and managers claim that they simply cannot afford an increase in liability insurance premiums this year with over two thirds (67%) expressing concern that further hikes will force them to close their doors.
By far the biggest worry for owners and managers is the fact that this adds to the overall growing burden of regulation on businesses. Eighty Three per cent of entrepreneurs complain that the UK business sector is over-regulated and that they are struggling to cope with increasing levels of red tape.
Furthermore, 79% of owners and managers argue that insurance companies are already making enough money out of small businesses without the prospect of further hikes this year.
This comes at a time when a recent survey revealed that nearly a quarter of small business owners and managers are also worried about the possibility of being taken to court by an employee. This suggests that the growing compensation culture in the UK is an increasing concern for small and medium sized businesses that do not have the financial resources to fight employee claims in court. With the average cost of defending a claim now around 5,000 it is not surprising that owners and managers are nervous.
Bibby Financial Services Chief Executive, David Robertson said, ìThe rising tide of employee injury claims and the growing compensation culture in this country is taking itsí toll on the small business sector. The prospect of further increases in employerís liability insurance premiums just doesnít bear thinking about. As the Forum of Private Businesses (FPB) points out, the SME sector in the UK accounts for 45.4% of UK turnover, and spiralling insurance costs will have a very damaging effect on the UK economy as a whole as vulnerable firms are forced out of business.
ìIt is encouraging that business support organisations such as the FPB and the British Chambers of Commerce (BCC) are lobbying the Government to do something about the growing problem of employerís liability insurance premiums. I hope that the Government listens and that businesses across the UK wonít have to face any more increases in the coming yearsî
Faced with rising costs, many small firms have no option but to pass the expense on to their customers in the form of higher prices. Whilst there is nothing owners and managers can do to cut insurance premiums, the following steps may help to slow down the rate of annual increases and limit the damage:
Shop around - never accept the first deal that is offered but do some research and compare different policies and premiums
Take time - do not leave it until the last minute to renew your policy. Allow time for the insurer to survey premises and make a thorough health and safety assessment
Train staff - improve employeeís awareness of health and safety measures such as spotting potential hazards and training them the correct way to lift heavy weights
Maintain equipment - regular servicing and maintenance checks are essential. Keep a log of all maintenance work carried out
Regularly review - undertake an annual health and safety audit detailing any actions needed and remember to act upon them
Reduce risk - implement your own workplace risk assessment to look for potential hazards by double checking everything from equipment, electrical systems to chairs
Consult an expert - some firms now specialise in undertaking health and safety checks. Bibby Management Services has launched a brand new service doing just that - for only 250, a consultant will undertake a full health and safety survey and detailed report
Insurance premium hikes a threat to UK small businesses
Steep hikes in insurance premiums continue to be a major cause of concern for the UKís small and medium sized businesses, with many firms still finding it difficult to find cover at all and others struggling to survive.