Just 40% of new businesses operating with insurance - AXA
(ShareCast News) - More people than ever are throwing off the shackles to start their own business, but are doing so without appropriate insurance, UK insurer AXA has revealed in a survey.
Only four out of ten companies which have been set up in the last three years said they use any type of insurance, with many claiming they are 'too small' or 'too young' to have acquired any serious risk.
Around 60% of the companies admit to having no cover for workplace injury or illness amongst their staff.
With a huge boom in the number of startups blossoming across the UK, insurance claims are now costing some companies over £1m.
"The key finding of this survey is that people are operating businesses without insurance because they think they are 'too small' or 'too young' for risk," said AXA Direct Managing Director Gareth Howell. "We see no evidence in our claims figures that this is the case: we regularly settle injury claims on behalf of microbusinesses that top the million pound mark.
"Added to that is a significant rise in property damage claims too, as the value of fixtures, fittings and floorings is going up in British properties across the board," Howell added.
Freelance workers are particularly at risk, with a quarter of those in their first year of business possessing indemnity insurance, which is not required by law but often strongly advised by professional associations.
"We anticipate that claims against small firms will increase in value, and they are affecting a wider spectrum of occupations than ever before. Compensation culture has played its role here," Howell concluded.