Why Businesses Should Be More Transparent About Their Insurance Cover

When consumers choose a business, they often look for signs that the company is trustworthy and legitimate. They may check online reviews, verify contact details, or look for professional accreditations. One area that is frequently overlooked, however, is whether a business holds appropriate insurance cover. 

For many businesses, having insurance is a fundamental part of acting responsibly. Professional indemnity insurance and employers’ liability insurance play important roles in protecting both the business and its customers, and both are a legal requirement for any business operating in the UK. Yet despite this, many companies make little or no mention of their insurance arrangements in their marketing materials, websites or customer communications. 

Building Consumer Confidence 

All customers want reassurance that they are dealing with a professional organisation that operates with integrity. By openly stating that appropriate insurance is in place, businesses can demonstrate that they have considered the potential risks associated with their activities and have taken steps to protect themselves and their clients. 

For consumers, this can provide an additional level of confidence, particularly when engaging tradespeople, consultants, contractors or other service providers where mistakes, accidents or damage could have significant consequences. 

Helping Consumers Identify Legitimate Businesses 

Unfortunately, not every business is genuine or properly established. Rogue traders and fraudulent operators often avoid investing in appropriate insurance because it represents an additional cost and requires a degree of accountability. 

During our Operation Deepclean initiative, KwikChex found that scam businesses don’t have insurance, proving that Insurance Transparency is a potent tool for both detecting scammers and for legitimate businesses to provide reassurance to prospective customers and business partners. 

While the presence of insurance should never be viewed as an absolute guarantee of legitimacy, businesses that are willing to disclose their insurance arrangements can differentiate themselves from less reputable operators. Transparency in this area can act as one of several indicators that a company is professionally managed and committed to operating responsibly. 

SME Concerns 

Research commissioned by the Association of British Insurers (ABI) has highlighted a significant protection gap among UK SMEs. 

“A significant share of businesses say they do not have products which are compulsory – 39% of firms with 1 to 9 employees say they don’t have employers’ liability insurance; and 39% of firms with company-owned vehicles say they don’t have commercial vehicle insurance. While respondents may be under-reporting actual cover, or misunderstanding terminology, this finding underlines the importance of action to close the SME protection gap – especially as previous studies have found similar results.” 

Not only are large numbers of SMEs uninsured, but many of those with insurance are also underinsured. 

“Underinsurance, where SMEs do not have enough cover, is driven by (1) business owners not understanding products; (2) deliberate decisions to insure less than the full risk; (3) failure to update cover regularly. Only half of respondents said they have reviewed the types of insurance they hold or their level of cover in the last 12 months.” 

Read the report on the ABI website  

The Overlooked Opportunity 

If many businesses are overlooking their insurance needs altogether, those that openly communicate and regularly review their cover can help distinguish themselves as credible, accountable, and customer focused. 

Businesses spend considerable time and money building trust through websites, branding and customer testimonials, yet a simple statement confirming that they are appropriately insured can reinforce those efforts. 

Encouraging Higher Standards 

Greater openness about insurance could also help raise standards across industries. If consumers begin to expect businesses to disclose that they hold appropriate cover, organisations that currently overlook insurance or fail to communicate it may be encouraged to review their practices. 

Changes At KwikChex 

While we have always maintained the appropriate insurance cover, for many years we overlooked the importance of making our insurance arrangements visible to consumers. 

Having recently reviewed our policies, we believe this should become standard practice across all sectors and would encourage other businesses to review how they communicate their insurance cover. 

Trust is one of the most valuable assets any business can have. Being transparent about insurance is a relatively simple measure that can strengthen credibility, reassure customers, and help consumers make more informed decisions about who they choose to work with. 

View the KwikChex Reassurance page and insurance documents