UK entrepreneurs put livelihoods at risk

Date: 12th January 2010

UK sole traders could be risking their business by not having adequate insurance, a new report has suggested.

Research from Scottish Widows has revealed that 2.6 million contractors could be leaving their business vulnerable.

According to the study, just two per cent of sole traders are insured for the loss of a 'key person' upon death.

A further 81 per cent of the entrepreneurs said they are not covered to protect the cost of replacing a key person or any subsequent profit losses.

This is despite 86 per cent of sole traders saying there is a key person who helps them run their business.

Clive Allison, protection market director at Scottish Widows, said that while thinking about personal health issues or what will happen to their business when they're gone may be a distant thought, it is "vital" sole traders protect the future of their enterprise.

He added: "Sole traders are the engine of the UK economy but are often reliant on one or two key people to keep themselves afloat."

"Our research highlights that without suitable protection in place, a serious illness, disability or death could be the last straw for these vital grass root businesses."