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Comment: Insurance can’t be an after-thought

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Small businesses and start-ups may not know which cover they need, nor the consequences of getting it wrong

Do you have any start-up or small-business clients?

According to a recent report by Aviva, one in 10 small businesses does not have employer’s liability insurance in place and, of the remaining businesses, another one in 10 is unable to say whether it has the correct insurance in place.

We know what a grave mistake they’re making but small businesses and start-ups run on limited time and budgets. They may not be aware of which insurance they need, and in particular of the consequences of getting it wrong.

If you have such clients, they present you with a fantastic opportunity to demonstrate your worth by helping them navigate the complexities of business cover.

Employer’s liability insurance is compulsory for all businesses that employ staff, and covers costs and compensation relating to injury and disease in the workplace. Some exceptions do exist, such as where a spouse is classed as an employee, or where the only employee in a limited company is the shareholding director. There are punitive fines of up to £2,500 a day for those not having cover, so it shouldn’t be too difficult to convince your clients that it is a ‘must do’.

While speaking to your SME commercial clients, it may also be worth mentioning the benefit of group accident and sickness policies. This type of cover is provided as an employee benefit and as such the premiums are tax deductible. It gives protection in the event of a valued member of staff being unable to undertake their duties; equally importantly, it demonstrates to employees that the business is invested in them and their general wellbeing.

As a nation, we’re woefully under-insured in terms of personal life insurance and income protection. Only a quarter of UK adults have a life policy, 6 per cent have critical illness and just 4 per cent have income protection, so providing additional employee benefits such as accident and sickness protection can help with recruitment, employee retention and brand integrity. These are all highly valued by start-ups and high-growth SMEs.

Don’t let insurance be an after-thought for your commercial clients; the cost of investing in cover is likely to be far less than the potential costs of doing nothing. Speak to your SME and start-up clients today. Your advice and assistance could not only save and protect their business but also help it to prosper and grow.

Geoff Hall is managing director of Berkeley Alexander

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