“Most SME’s Are Underinsured” reports Insurance Company Axa

A risk worth taking?

A recent study by Axa reviewed the level of cover in place for SME’s who had existing.  The aim of the study was to investigate what the gaps in cover may be.  The findings were surprising, the study found that of the 4.9 million business’ operating in the UK, many are unknowingly underinsured, with up to half a million potentially breaking the law.


Employers’ Liability Insurance – Axa found that over half of the businesses requiring this have failed to take out cover.   Businesses that employ staff in any capacity are required by law to have Employers’ Liability cover in place and to display the certificate.  (Axa found that almost a quarter of those with cover were failing to do this.)

Professional Indemnity Cover Axa discovered that only 48% of businesses in their study who provided business advice to clients and others had Professional Indemnity Cover in place.

Vehicle Cover – Many businesses fail to realise and take out the necessary cover for their vehicles when used for business purposes (40%).

Public Liability Cover – is crucial for protection when meeting with clients or suppliers or members of the public. Axa found however that 43% of businesses failed to have this cover in place.

Home Office – only just over a quarter (26%), of businesses in the study had discussed this cover with Insurers, with only 22% having cover for taking business equipment out of the home.


In the majority of circumstances, inadequate cover tends to be as a result of not knowing what is required or failing to inform Insurers’ of changes in circumstances.  Others may fear the additional cost of insurance.

However, should a business be in the unfortunate position to have to make a claim, costs could equate to thousands or millions of pounds, for example, a claim made against the business could mean expensive legal costs.

The best precaution to ensure you have the correct cover in place for your business is to discuss your requirements with your Broker or Insurer and to keep them informed of any changes.


Sources: Axa   The Post