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Thursday, 5 December, 2002, 13:32 GMT
Firms warned over insurance shortfall
Village shop
Small retailers are among a large number of uninsured businesses
Thousands of small and medium businesses (SMEs) in the UK are operating without insurance, threatening the welfare of employees, a report has warned.

A survey from Axa Insurance, the UK's third largest insurer, suggested 16,000 SMEs had no insurance cover.

Rising premiums were blamed for deterring firms from taking out policies.

More than half of the companies operated in the retail, distribution and transport sectors.

"We are concerned that this lack of cover threatens the future viability of small businesses and has a knock-on effect for their employees," said Mark Cliff, commercial distribution director at Axa.

Simple measures

Mr Cliff said Axa would be introducing new measures to help businesses keep up with their premium payments.

"We have a responsibility to educate small businesses about measures they can take to manage their insurance premiums."


The government must work with insurers and small businesses to avert a growing crisis

David Bishop, FSB

According to Thursday's report, more than 210,000 SMEs are also operating without employers' liability insurance, a legal requirement for all companies employing more than one member of staff.

This means up to 1.8 million employees are not insured while at work.

A spokeswoman for Axa told BBC News Online that a significant number companies were unaware of simple measures they could introduce to reduce premiums.

These measures could be as simple as having an induction policy for new staff, or putting fire precaution instructions on the wall.

Government help

The Federation of Small Businesses (FSB) joined the push for increased assistance and called on the Treasury to limit premiums, reducing the risk of companies being caught out.

"We have been warning the government since August that many small businesses are being forced to trade illegally often due to rising premiums," said David Bishop, deputy head of parliamentary affairs at the FSB.

"The government must work with insurers and small businesses to avert a growing crisis."

See also:

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