Firms ‘at risk on insurance cover’

New research has shown that more than a third of UK small or medium enterprises (SMEs) could be putting their business at risk by failing to insure their key staff.

The latest RSM Tenon Business Barometer, a quarterly survey carried out by YouGov amongst senior management in SMEs, found that 42 per cent had failed to insure key staff.

Just under one in three SMEs said they had insured senior personnel and 22 per cent had some of their senior people insured.

Nick Courtney from RSM Tenon said: “Most business owners will insure their company against flood and fire, but many do not think about the huge impact of losing highly skilled staff.

“Coping with the death or long-term illness of a key member of staff is difficult, but businesses need to take steps to minimise the detrimental effect such loses could have on their productivity.

‘We have also seen cases where a business partner dies and their interest in the company passes to their spouse. Companies need to consider that where that happens, they may not be in a financial position to buy back the interest in their business. Insuring against this could help to give business owners peace of mind about the long-term future of their company.”

SMEs are more likely to feel the impact of the loss of a key employee as they will have fewer people and resources to draw on.

Link: Business Link insurance guide