18371Henderson Insurance Brokers Teesside has released research that shows many small and medium-sized enterprises are under-insured, particularly when it comes to vital business interruption cover.

The new study commissioned by the Stockton-based firm, highlights that SMEs are failing to ensure that they have adequate cover, including in key areas such as personal accident insurance and business interruption insurance.

According to Henderson Insurance Brokers, while business owners are required by law to have employer’s liability insurance and road traffic act insurance, they all too often neglect other areas.

Participants in the research were asked about the insurance policies they had taken out and it found that only 33% of business owners had personal accident insurance, and even fewer (11 per cent) were protected against business interruption.

Business interruption insurance covers for a loss of income during periods when firms cannot carry out business as usual due to an unforeseen event – it aims to put a business back in the same position before the event occurred.

Most policies will cover business interruption as a result of damage caused to a business’s premises or equipment by fire, storm or flooding or the breakdown of essential equipment.

Those surveyed also were asked whether they used a company car or a personal vehicle. Fifty seven per cent used a private vehicle and revealed that they frequently travel for business purposes, however only 25% of these had the additional insurance in place to cover this.

The most common business journeys that may not be covered by a private policy include travelling to a training course, going to the post office and driving to another office.

Jonathan Willett, a Director at Henderson Insurance Brokers Teesside office, said: “Too many businesses are playing ‘Russian Roulette’ with their insurance requirements.

“While they are actively seeking employer’s liability insurance, they are throwing caution to the wind when it comes to other arguably essential insurance such as business interruption insurance.

“Business interruption cover serves to protect businesses from unforeseen circumstances that can, and do, occur.

“Without it, as in the case of a fire for instance, someone with buildings and contents insurance would be able to claim for the equipment they lost but would still be without income during its downtime leaving them vulnerable and affecting its ability to pay creditors and employees.”


Mr Willett added: “Too many business owners are laying themselves open to unforeseen events that can lead to major business interruption. Perhaps they are new business owners that do not know about this insurance or, even more worryingly, they are burying their heads in the sand and think that it won’t ever happen to them.

“For whatever reason, our research highlights that it’s vital that businesses look to shore up their cover to protect themselves from all eventualities.”