How SMEs can mitigate risk through Insurance 

Small businesses are becoming exposed to an increasing range of risks that can have a serious impact on their business performance and even their survival. 

To illustrate the scale of the issue, of the 4.3 million small businesses in the UK, 56% settled disputes out of court last year. 

The increasingly litigious nature of the working environment has led to a real need for SMEs to address their level of financial protection. As an example, Hiscox's SME Risk Barometer research study found that 70% of UK SMEs believe they could be faced with increased legal claims due to the increase of a 'no-win, no fee' legal culture. 

Not only that, but to take just one employment issue, the age discrimination laws, enforced in October 2006, have become a major cause of concern for SMEs. A survey from the Federation of Small Businesses reported a 664% increase in calls to their free legal helpline relating to questions over age discrimination in the past year. 

Prevention is less costly than the cure. Companies should ensure that they comply with all current regulations and prepare for any relevant future legislation, implement clear and ethical employment policies, and review all their systems and procedures. Keeping abreast of all these rules, directives and changes in legislation can be a daunting task; that's where the expertise of an independent insurance broker can prove invaluable, helping to ensure that you have the most effective cover in place to protect you and your business. 

Insurance is often one of the last things to consider when operating a business, but it could be the crucial factor that could prevent its disruption and even save your business as a result of a dispute. 

Dated: March 2009

Sources:

http://www.is4profit.com/business-advice

http://www.hiscox.com/