27th May 2008
Small businesses 'failing to insure key staff'
Smaller firms are failing to take out adequate insurance to protect staff critical to their business, new research has claimed.
Financial consultants the Jelf Group say that 60% of small and medium enterprises (SMEs) lack appropriate cover for key staff in the event of their death or critical illness.
The research, reported by Post Online, suggests that the loss of critical staff members can lead to losses of between £150,000 and £1 million, but that just 41% of businesses insure themselves against loss of staff.
"Companies are taking massive risks by not insuring the 'key' people within their business," commented Jon Baker, business development manager at Jelf Group. "Many small businesses don't include key person protection as a standard business cost and fail to incorporate it into their annual insurance and risk mitigation budget for the year."
Mr Baker said that the risk was higher for SMEs because the impact is less easy to absorb in a smaller team.
"The potential damage involved should prompt any company to purchase insurance protection for their key people," he added.
Financial consultants the Jelf Group say that 60% of small and medium enterprises (SMEs) lack appropriate cover for key staff in the event of their death or critical illness.
The research, reported by Post Online, suggests that the loss of critical staff members can lead to losses of between £150,000 and £1 million, but that just 41% of businesses insure themselves against loss of staff.
"Companies are taking massive risks by not insuring the 'key' people within their business," commented Jon Baker, business development manager at Jelf Group. "Many small businesses don't include key person protection as a standard business cost and fail to incorporate it into their annual insurance and risk mitigation budget for the year."
Mr Baker said that the risk was higher for SMEs because the impact is less easy to absorb in a smaller team.
"The potential damage involved should prompt any company to purchase insurance protection for their key people," he added.
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