Just under two thirds of small and medium-sized enterprises (SMEs) do not have Professional Indemnity Insurance, according to a study by Direct Line for Business.
Not all businesses need Professional Indemnity Insurance, but those that do out of the remaining 3.3 million of the UK’s 5.2 million SMEs could find themselves uninsured should their clients suffer a financial loss as a result of negligent or poor advice.
Direct Line for Business also found that 14% of those surveyed plan to take out an Professional Indemnity Insurance within the next 12 months.
Despite a 14% rise in the number of SMEs taking out a policy over the past year, there was a 15% drop for micro-businesses and 6% in small businesses.
Gary Holmes, Products Manager at Direct Line for Business, said: “The number of sole traders with PII has risen sharply over the past year, underlining the importance these entrepreneurs are placing on protecting themselves from the potential knock-on effect of a client suffering financial losses. That said, there are still a large number of businesses who are offering services or advice that don’t have the right cover in place, thus exposing their businesses to huge risks that could cripple their enterprises."