160K SMEs at Risk of Fines & Prosecution Without Liability Insurance

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160K SMEs at Risk of Fines & Prosecution Without Liability Insurance


Small businesses are the backbone of the UK economy. Over 5 million SMEs contribute nearly half the country’s total employment and revenue. However, a new study by Smart Money People has revealed that as many as 160,000 small businesses employing between one and nine people could be without compulsory employer’s liability insurance by the end of 2023, putting them at risk of prosecution and heavy fines in the event of an employee being injured or falling ill as a result of their work. 

The study found that small businesses who are cancelling or decreasing their coverage in an effort to reduce costs have concerns about this course of action. Over 65% of those surveyed are anxious about losing access to additional support provided by insurance policies, including access to expert legal advice and guidance, while 52% are worried about the financial implications of being uninsured, unable to make claims or having to source funding from other sources – if that is even possible. Additionally, 27% fear that they may be unable to bid for or take on certain types of work for which insurance is compulsory, jeopardising future growth. 

However, the study also suggests that all SME business insurances are set to grow this year, with Directors’ and Officers’ liability insurance likely to see the biggest net increase, particularly amongst small businesses with 10-49 employees. This type of insurance protects company directors and officers from claims arising from decisions they make in their professional capacity. 

With the lingering effects of the COVID-19 pandemic on the economy, it is more important than ever for small businesses to take the necessary steps to protect themselves and their employees with appropriate insurance coverage. The study’s research highlights the risks of being uninsured and the importance of making informed decisions when it comes to selecting insurance policies.