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560,000 illegal traders put staff and customers at risk

Cutting expenses because of the recession means 560,000 small businesses may be trading illegally, according to a major insurance company.

Employer liability insurance is a legal requirement for every business and 12% of small firms admit they do not have any business insurance, says insurance firm Aviva. These equals 560,000 out of 4.7 million UK small businesses could face financial problems if a worker or customer claimed compensation against an employer.

Aviva commercial product manager David Bruce said: "It is worrying to see how many businesses have admitted they have no insurance at all. 

“If one of your staff, or a customer, has an accident at work it is unlikely you would be able to pay out a claim that could run into thousands of pounds yourself. Protecting what you've already got and what you're trying to build for the future should be fundamental for any conscientious business owner."

"Britain's small business community remains entrepreneurial, creative and opportunist at heart, with an innate ability to be both flexible and versatile. The ability to anticipate and adapt to the changing environment is key for any successful business, and business owners are clearly leading the way in this regard."

The survey showed the most common business reactions to the recession are:

    * Bringing out new products

    * Longer opening hours

    * Marketing promotions and discounts

    * Cutting staff pay, benefits and hours

    * Redundancy

Almost 1 in 7 (69%) of businesses taking part in the survey claimed cash flow was one of their biggest problems.

Three out of four entertainment businesses like pubs, clubs and restaurants said cash flow was a serious issue. Small shops, salons and beauticians agreed they were in a similar position but professional services were having an easier time. One in five owners of small businesses polled regularly works over 50 hours per week.

This adds up to 104 hours or 4.3 days per year over the EU Working Directive's rules. 


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