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There are still millions of small enterprises in the UK that are not fully covered with the right insurance products, according to Aviva.

A survey by the insurer has found that the recession is forcing some businesspeople into taking unnecessary risks – the downturn is leading to cut-backs on crucial areas of business protection and operational security. Over one in 10 small business people admitted that they don't have any commercial insurance in place.

Given that employers liability insurance is required by law, there is a risk that some companies could be trading illegally. With an estimated 4.7 million small enterprises in the UK, that means there could be around 560,000 businesses that are potentially at risk of being out of pocket should a disaster strike, says Aviva.

David Bruce, commercial product manager at Aviva, says: "Britain's small business community remains entrepreneurial, creative and opportunist at heart, with an innate ability to be both flexible and versatile. However, it is worrying to see how many businesses have admitted they have no insurance at all. If one of your staff, or a customer, has an accident at work it is unlikely you would be able to pay out a claim that could run into thousands of pounds yourself. Protecting what you've already got and what you're trying to build for the future should be fundamental for any conscientious business owner."

In better news, Aviva found that over half of small enterprises in the UK have taken steps to diversify their business in order to survive the recession according to the research.

Diversification through new products or services, opening at weekends, trading for longer hours and targeting new customer groups were the most common actions taken by small business to weather the economic storm. Of course, all this costs money and credit for small businesspeople is scare in this credit crunch – so if you want to make the most of your enterprise you need to get some professional financial help.

If you haven't got cover for your business, you need to act fast. Not protecting yourself and your enterprise could cost you dear should the worst happen. For only a few pounds a month and a quick consultation, you could allay any fears and concentrate on growing your business prudently in this recession.

SOURCE: Aviva, 28/09/09

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