Protection Gap: Micro-businesses could lose £1.4bn in annual revenue

The Momentum UK Team 29 May 2013

Microbusinesses face potential annual revenue losses of £1.4billion by failing to protect their businesses adequately according to a report released today.

1.7 million micro-businesses, defined as those who have between one and nine employees or sole traders, have been victims of incidents such as vandalism, damage or theft over the last year, suggests the report by Lloyds TSB.

However, 36% of microbusinesses have failed to put adequate protection in place to protect against such threats, and 31% of those who were affected were not fully operational for a more than a week, with one in five taking up to a month to get back on their feet.

Damien McGarrigle, from Lloyds TSB Insurance, said:

"These businesses are the backbone of the economy, but many are unnecessarily leaving themselves exposed and vulnerable without adequate protection in place.

"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."

Some (7%) of those who had experienced vandalism, damage or theft over the last year were subsequently concerned that their business would not survive as a result.

The report also found that 26% owners of businesses with fewer than 10 employees find little respite from the worries of running a business, even taking their worries home in the evenings, at weekends or on days off.

It was suggested that younger age groups may be worrying more about their business, and 17% of those in the 35-44 age group worried that running a business was having a negative impact on family life, compared to just 6% of those over the age of 55.