By Marcus Leach
Britain has in recent years become a nation of budding entrepreneurs, but three in four small to medium sized enterprises (SMEs) would struggle to survive a major interruption to their business without the necessary protection, warns AXA.
AXA is in total agreement with the Government that small business start-ups are crucial to the future growth of the UK. However, it is concerned that without the proper protection in place new businesses may have the opposite effect. It is important for businesses to protect their accumulated assets before they look for growth opportunities.
Over the last few years Britain has seen a wave of entrepreneurship as individuals fulfill their aspirations of running their own business, with nearly 450,000 small businesses registering during 2011, a significant increase on the 380,000 registrations during 2010.
However, new research from AXA has found that many are starting up with little awareness of the risks they face, nor the knowledge of how to protect themselves. One in four said they did not know what sort of insurance they needed when they launched, with the main reasons cited as being new to running a business and not knowing where to go to for advice.
The research carried out this month found that despite the risks they face, few small businesses plan for every eventuality: 19% of UK SMEs surveyed could not identify the risks facing their business.
Almost half do not have a business continuity plan in place at all, and 91% have not reviewed their policies to see if they are covered for public disturbances such as the London riots.
“Small businesses are the backbone of our economy and will help drive us forward, so they need to be as prepared for the risks they may face as they grow by taking out as much protection — and the right kind — as they can afford," Amanda Blanc, CEO of AXA Commercial Lines, said.
“Our research showed that many SMEs are starting up without knowing what they need, or who to turn to for advice."
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