A study conducted by AXA UK, suggests that Small and Medium Enterprises in the UK have much less business insurance than similar sized companies across the rest of Europe. Out of the businesses which took part in the survey, only 39 percent of UK SMEs are insured against interruption of business, while 47 percent of SMEs don’t have a business continuity plan in place.
However, the report also revealed that UK businesses don’t rely as heavily on bank debt as their European counterparts. This indicates that UK companies may be reserving cash in case of crisis, reacting to potential risks. At least three months of cash was being held by 36 percent of respondents, in comparison to only 30 percent in the rest of Europe.
AXA UK, the insurance company believe that they must encourage UK companies to take out adequate insurance cove r and use their cash reserves to invest in the business. Amanda Blanc, chief executive officer of the commercial products from AXA said:
“It is clear that whilst they are worried about rising costs, regulation and tax burdens business continuity planning among SMEs in the UK is not as advanced as it is in many other countries.”
She went on to add that UK businesses seem to have dealt with the provision of finance, with measures in place but fail to purchase adequate business insurance against some of the main risks to any business. She stated that is was worrying to find so many companies “self insuring”.
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