Britain’s bosses’ union has warned that soaring insurance costs are deterring business owners from tendering for public sector contracts, exacerbating the impact of the coronavirus crisis on SMEs.
Sky News has seen a letter from the Institute of Directors to Kwasi Kwarteng, the new business secretary, in which it urges an overhaul of"the public sector's approach to procurement and risk management", amid suggestions some bodies are requiring disproportionate levels of insurance cover. In the letter from Jonathan Geldart, the IoD director general, he cites research suggesting nearly half of company directors had seen a rise in the cost of professional indemnity insurance.The IoD chief said the impact of the changes was"profound" for smaller businesses, which could be"forced to stop submitting tenders for public sector work altogether".
"Cost increases put yet more pressure on businesses and entrepreneurs at a time when, for many, cashflow remains fragile."