Small firms must make sure that they have adequate insurance in place or risk loosing thousands of pounds, according to one expert.

Chris Simpson, an account manager at Business Link, explained that some SMEs seem unaware that cover is needed, while others are unwilling to pay.

He said: "[With] a lot of small businesses it is a lack of awareness of what insurance policies are out there and what insurance policies they should have - not only by law but as a matter of course for their type of business."

Some firms might be tempted to cut back on costs by skimping on businesses insurance, he added.

However, this could prove to be a false economy with research by Premierline Direct showing that small firms could be leaving themselves open to a total of £3 billion worth of losses and legal claims by not having enough insurance in place.

Research by the firm found that 30 per cent of owners do not have any business insurance at all.

RELATED ARTICLES:

• 'Action needed on payment term changes'
• SMEs 'need £1bn survival fund'
• Awarding government contracts to SMEs 'will boost the economy'
• 'Stick the to rules' fined boss urges
• Government's bank bail-out 'must help SMEs'