“One claim and we’re finished” as businesses priced out of cover

Small businesses across the UK are being pushed towards breaking point by an insurance crisis that is largely going unnoticed. Premiums for essential cover have surged by as much as 200% in a year, leaving many owners trapped between unaffordable costs and the risk of going without protection. With some now underinsured or dropping cover altogether, industry warnings are growing that this quiet crisis could trigger closures, job losses and lasting damage to local economies.

INSURANCE MELTDOWN as PREMIUMS ROCKET

The UK’s small businesses are being pushed to the brink by an insurance crisis no one is talking about. Some firms are reporting that their premiums have jumped by a staggering 30% to 200% in just a year.

Public liability, employer’s liability, building insurance are all shooting through the roof and small firms are having to unable to and risk the dire fallout of going without cover.

Big firms can negotiate bulk deals with insurers but the corner shop, café, florist, tradesperson are being priced out of protection.

“WE CAN’T AFFORD TO BE COVERED BUT WE CAN’T AFFORD NOT TO BE”

Photo by Vlad Deep on Unsplash

Small business owners say they’re trapped in a nightmare where premiums are doubling or tripling overnight, excesses are rising to unaffordable levels, there are lots of exclusions in policies and on top of that some insurers are refusing to cover certain trades. For many, insurance is now one of their biggest business bills.

With costs spiralling, many small firms are being forced into dangerous corners. One owner said: “My insurance went from £1,200 to £3,800. Nothing changed except the price.” Another admitted: “I’m under‑insured because I can’t afford full cover. One accident and I’m finished.”

Some small business owners aren’t even covered for the insurance they must have under law such as vehicle or employer’s liability insurance. According to a recent report from the ABI (Association of British Insurers) some are under‑insuring their business, taking risky, bare‑bones policies or dropping cover entirely. This isn’t a business decision. It’s desperation. And it’s a ticking time bomb.

One claim, one fire, one accident, one customer injury, could wipe out a business overnight.

WHY ARE PREMIUMS EXPLODING?

Insurers blame:

• Rising rebuild costs

• Higher legal payouts

• More claims

• Inflation

• “Market conditions”

But small firms say they’re the ones being squeezed because they’re too small to fight back.

THE REAL DANGER is A WAVE OF BUSINESS CLOSURES.

If small firms can’t afford the insurance policies they must have by law, they can’t legally operate. That means more are operating illegally or closing which means empty shops, job losses and higher unemployment and more local communities hollowed out. This is a national economic threat. Some small business owners are one incident away from losing their businesses: one claim against them could make them bankrupt.

Insurance costs are exploding and behind every premium hike is a real person, a real family, a real business fighting to survive. This comes on top of all the other rising costs business owners are struggling with, costs of materials, energy, wages, taxes and business rates. Small firms are under‑insured, over‑exposed and ignored. This is a crisis that could wipe out thousands of small businesses.