Tips for safeguarding your business by Damien McGarrigle, Head of Business Insurance, Lloyds TSB on 29-May-2013

Small businesses in Britain are facing a potential £1.4bn annual loss of revenue by failing to safeguard against business threats, according to new research.

The research from Lloyds TSB Insurance – which polled British businesses with ten or fewer employees – revealed that just under one in 10 (7%) owners who have experienced an incident in the last year worried their business wouldn’t survive as a result. Yet over a third (36%) of the nation’s small business owners haven’t taken any measures to protect their business.

The Big Issues for Small Businesses report revealed 1.7 million (38%) microbusinesses were affected by significant incidents such as theft, vandalism or damage in the last year alone. Following this almost a third (31%) of those affected were unable to operate fully for longer than a week. For around one in five (19%) it took up to a month to be fully operational, potentially risking a further £3.4bn loss.

"These businesses are the backbone of the economy, but many are unnecessarily leaving themselves exposed and vulnerable without adequate protection in place," said Damien McGarrigle, head of business insurance at Lloyds TSB Insurance. "Unforeseen incidents are likely to have greater impact on a small business, which could jeopardise its future, putting a strain on owners and their families if they are underinsured. Making sure appropriate insurance cover is in place safeguards against the main risks and liabilities, leaving business owners better positioned for success."

Under insurance remains a key issue for 40% of UK small businesses that haven’t taken out the right level of cover, gambling a hefty financial shortfall should they need to claim.

For more than a quarter (26%) of microbusiness owners, weekends and days off are no escape from the worries of running a business. The poll found that one in five (17%) of those aged 35-44 worry that their business is having a negative impact on family relations, compared to just one in 20 (6%) aged 55 and over.

Work - life balance revealed a similar trend with almost three-quarters (69%) of 35-44 year-old respondents confessing to working on weekends or days off. This decreased with age, with just half (56%) of those aged 45-54 and 42% of those aged 55 and over admitting to working out of office hours. More than one in 10 (12%) said that they were reliant upon family members to enable them to run their business, such as through the provision of childcare.

Damien has the following tips for microbusinesses or those starting up:

1. Seek professional advice on safeguarding your business – make sure you have the appropriate professional indemnity and public liability insurance required by law.
2. Make sure you are up to date on legislation, rules and guidelines and aware of issues such as planning permission, employee rights and fire risk assessments.
3. Make your premises less inviting to thieves by installing the right security products – from locks and shutters, to intruder alarms and external security lighting.
4. Working from home could invalidate your home insurance and affect your life insurance policies so inform the relevant insurers to make sure you are protected.
5. Additional business insurance for items such as computer equipment, stock and tools will help provide further safeguards.
6. If you require use of a vehicle for work, obtaining appropriate motor insurance for business use is vital.
7. Plan for severe weather, such as storms or freezing temperatures. Keep valuable equipment and stock off the floor and away from windows.

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