The state of SMEs
- British SMEs had a strong 2014 with 75% improving or maintaining their turnover compared to 2013;
- 180,000 people started running their own business in 2014;
- 21% of SMEs took on more staff in the past year and 4% employed people for the first time;
- 4% have no insurance cover in place, equivalent to over 200,000 companies across the UK.
PROFITS are up and UK SMEs are thriving and confident of future success despite glaring gaps in their insurance cover, a study has revealed.
Research by LV= Broker reveals that 75% of SMEs improved or maintained their turnover in the past year. And 41% of those surveyed, including sole traders and companies employing up to 250 people, have seen their turnover increase in the past 12 months, while a further 34% say turnover remained steady at 2013 levels.
In addition, a new generation of SME owners has entered the market as 180,000 people started running their own business in the past twelve months.
As well as increasing turnover, SME owners have also created more jobs. Some 21% of SME owners say they have taken on more staff in the past year and 4% have employed people for the first time, equating to at well over 200,000 new jobs.
By law, all businesses employing staff must have employers’ liability (EL) insurance as a minimum otherwise they can be fined up to £2,500 a day by the Health and Safety Executive (HSE). Despite this, the research found that 80,000 SMEs who employ staff have no cover in place, leaving them vulnerable to prosecution and fines.
On top of this, 15% have no financial back-up plan in place if they were unable to trade for any reason and 4% have no insurance, equivalent to over 200,000 companies across the UK.
Mike Crane, commercial lines director at LV= Broker, said: “SMEs are the lifeblood of the British economy and it is great to see that so many have increased their turnover in the past year and taken on more staff. The research shows that thousands are leaving themselves vulnerable to prosecutions and fines by the HSE for not having appropriate insurance in place. Getting the right advice on cover from a specialist insurance broker is invaluable for business owners and can make the difference between being able continue trading or not should the worst happen.”