Poor risk assessment cost SMEs £10k last year, survey finds

The insurer surveyed 1,500 business owners in the UK employing up to 249 people to understand how SMEs are approaching health and safety in 2023. 

It discovered that sectors varied in their approach to risk. While SMEs in engineering, manufacturing and healthcare were ‘more likely’ to have assessed and mitigated against their risks, this was not true elsewhere.

Only 66 per cent of those representing property and construction businesses claimed to have a risk assessment policy. In retail, 40 per cent of retail SMEs did not have one.

Other findings showed that each SME had experienced an average of 3.2 accidents involving a member of the public, with each accident costing an average of £17,185 in compensation.

The impacts go beyond the financial, says Hiscox, with 34 per cent seeing a drop in performance indicators and 28 per cent finding it hard to attract new customers.

Hiscox used the findings to urge UK SMEs to carry out their risk assessments.

Nick Thornhill, Direct and Partnerships director at Hiscox, commented: “We remind business leaders to regularly review their current health and safety processes and ensure they are taking all necessary precautions to protect themselves, their employees and their customers.”

With the survey finding that nearly one in four businesses are failing to purchase public liability insurance, he added: “The last few years have been difficult for businesses, and any unanticipated costs as a result of accidents will only add to this.

"Having public liability insurance along with an up to date risk assessment, protects businesses against the cost of compensation, as well as the legal expenses associated with a claim. A risk assessment policy, renewed and updated at least annually, can help to mitigate potential hazards and create a safer space for all.”

Hiscox risk readiness report here