The latest surveys show one in 10 owners and directors know they don’t have enough business insurance and don’t care because they don’t believe they need cover.
Just over a third of businesses don’t know if they have enough cover and are unsure if their insurers would pay out a claim.
The figures are worrying for brokers and insurers who earn significant income from business insurance.
Some are urging businesses to reconsider their attitude towards insurance and warn protecting cash flow now may not pay off in the future if the worst happens and a claim is made.
Most businesses have a legal responsibility to take out bundled employer and public liability insurance.
Many regulated businesses – like accountants and financial services firms- have to take out professional indemnity cover.
Businesses are cutting insurances in three key areas:
- Legal protection cover offering advice from lawyers (31%)
- Commercial vehicle insurance for vehicle fleets (28%)
- Property insurance for business premises (21%)
One in six business managers and owners say they will cut their insurance spend even further if government spending cuts start to bite even more, while almost 75% will keep their insurance payments at the same levels and accept reduced cover.
They say that insurance is often expensive and takes a large slice of cash flow, often without any pay back.
Commercial insurer Allianz is warning record numbers of businesses could be underinsured.
Chief executive Andrew Torrance said: “We are urging companies to consider the risk to their businesses of being underinsured, as it can end up costing much more in the long run. The current precarious economic climate makes it even more important to have the right level of cover.”Insurance for landlords and small businesses insurance is widely available through brokers and online comparison sites.