Insurance for micro-businesses
Under new proposals from the Law Commissions of England and Scotland, upcoming reforms to insurance law should treat very small businesses, with fewer than 10 employees, in the same way as it does consumers.
The reasoning is simple. Many of them are no more financially sophisticated than individual consumers, and comparatively few of them use a broker to arrange their insurance cover, with about half buying direct from insurance companies (FSA, 2007). Currently, however, they do not receive the same mandatory protection against unfair contract terms in their insurance policies that consumers enjoy.
Any such change would affect a great many organisations. According to Government figures from last year, there are some 4.5 million so-called 'micro-businesses' in the UK, providing jobs for over 30% of private sector employees.
According to Commissioners David Hertzell and Colin Tyre QC, "We believe it is vital to ensure that this sector of industry is protected by the law. We are eager to hear the views of all interested parties, in particular micro-businesses, on our proposals."
The new proposals were published by the Law Commission in April this year, with a request for the views of interested parties by mid-July.
Contact
Judith Ellery Head of Employment
Bethan Southcombe Solicitor
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