One in 10 SMEs think employers liability insurance is not a legal requirement, reveals the latest research. Considering that fines, loss of reputation and failure to support employees are all likely consequences, this is an alarming statistic. If you’re an SME owner read on for more shocking statistics that take a closer look at what employers liability insurance is, and why it’s essential.
What is employers liability insurance?
Staff are the backbone of any business and employers liability insurance is designed to cover their backs. In the case of any issues, incidents or conflicts policies are in place to cover costs and support both parties. This includes scenarios such as remuneration, health/safety and redundancy.
- 25% of SMEs believe that employers liability insurance is only necessary if a business engages more than one employee
Regardless of how many employees are hired, employers liability insurance is still a legal requirement.
- Fines can be as large as £2,500 per day
Every business that operates without adequate employers liability insurance risks a daily fine of up to £2,500. For SMEs this could easily dripple the company in a matter of days.
- Just 29% of SMEs are confident they have the right cover
Insurance can be a complex path to navigate and SMEs agree. The latest statistics revealed that just 29% of business owners were confident they had taken out the right policy. This is extremely alarming as without the right cover claims are rendered obsolete.
- 12% of SMEs admitted they had no business insurance
Just think, 12 out of every 100 SMEs are not protected by business insurance. This includes employers liability cover, as well as other essential policies such as fire/theft, public liability and more.
- Just 5% of businesses in operation for 8-10 years had no insurance
The figure also confirmed the fact that long-standing businesses were more responsible than their newly established counterparts. While 25% of SMEs operating for under 12 months had no insurance, just 5% of those trading for 8-10 years left themselves unprotected.
At the end of the day, facing an employers liability insurance claim without adequate cover could lead to serious financial problems, and even closure. Not to mention a serious loss of public reputation and trust, as well as the guilt of not being able to support an employee in need.