Entrepreneurs 'leaving businesses vulnerable'
Commercial insurance
14th January 2010
Millions of sole traders in Britain are failing to effectively protect their businesses if anything was to happen to a "key person".
The Protection Report suggests that 77 per cent of entrepreneurs polled do not believe that their organisation would survive if a crucial individual was lost, but 73 per cent have failed to implement effective exit strategies.
According to the study by Scottish Widows as many as 2.6 million enterprises may be at risk, as most sole traders' operations rely on one or two people.
The majority (81 per cent) of entrepreneurs quizzed admitted that they did not have insurance to guard against losses and costs to replace a crucial worker, while just two per cent have a policy to cover for the loss of a key person through death.
"Without suitable protection in place, a serious illness, disability or death could be the last straw for these vital grass root businesses," Scottish Widows protection market director Clive Allison remarked.
Sole traders seeking insurance for business are also advised that experts have been highlighting the importance of continuity planning in light of some of the most extreme winter weather for a generation in recent weeks.
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