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Small businesses saving tens of pounds but risking thousands

1st October 2010 Print

With the UK economy officially back in growth, insurer RSA is warning small businesses not to become complacent when it comes to risk management and ensure that they have adequate insurance cover.

A study by RSA last year found that 41% of all UK companies become more conservative in a recession. The more positive economic climate could encourage business leaders to take risks including cutting insurance cover in order to save money for other activities.  While this may save a few pounds initially, they could face a bill of thousands should something go wrong.

David Greaves, SME Trading Director at RSA, said, "While some business risks tend to be reduced during times of growth compared with recession, they are always present and it is important that businesses ensure they have the most appropriate cover at all times.

"RSA's knowledge of SMEs has allowed us to build up a clear understanding of the issues they face and that is why we are calling on small businesses to implement appropriate risk management practices and ensure they are adequately protected."

According to RSA, the most important areas for small businesses to check they have sufficient cover are:

Business interruption - revenue and reputation are incredibly valuable at this time.  If anything were to happen to prevent a business from trading, the owner would want immediate support to get back up and running again without significant cost;

professional indemnity - as widely reported in the media, the recession has made Britain a more litigious society and therefore professional failures or mistakes are being challenged far more than ever before;

contents cover - the recession has led to a rise in unemployment 4 which typically tends to lead to an increase in incidents of theft.

Insurance is a vital part of a business' operation and if cash is tight, RSA offers a monthly interest-free direct debit installments option to help make budgeting easier.