Biba blog: SMEs need to get on the ELD train

As a mid distance commuter, I have noticed that the trains are getting busier with more people regularly commuting to London. This is despite rail fare increases and rising unemployment. This suggests to me that people are prepared to look further afield for work if the rewards are there and the local employment market is in decline.

There is a distinct similarity here with the government’s desire to get British businesses to look further afield into export markets. The biggest challenge is often to encourage SMEs traditionally content to operate in their local market to look at exporting and take advantage of opportunities for their business abroad. To achieve this it is important that those companies can obtain help, including credit protection.

Traditionally, many of these companies have approached and taken the advice of their banks or accountants. Biba backs this government initiative. As part of its support, Biba has an arrangement whereby the government-underwritten export insurance policy is available to businesses via Biba’s specialist trade credit brokers. This could be of real benefit to brokers’ clients who are looking to export into emerging markets, where traditional trade credit insurers may not be able to help.

Before any UK SME can start to export, however, its first legal insurance requirement is usually employers’ liability (EL) insurance, which brings me to the Employers’ Liability Database. On 1 April this year it becomes compulsory for insurers to populate the database with details of the employer reference number (ERN) and all subsidiary companies included within the EL policy.

Flurry of activity

Despite the transitional period for compliance with the FSA’s regulations for recording this data being put back to April 2013, there is now a flurry of activity among insurers and brokers to ensure that this information is collected sooner rather than later. This is not without its problems, however, as there seems little consistency among insurers in how they are approaching this with their broker partners. There is also reluctance on the part of many SMEs to provide the information. This is why there is now a campaign led by the Employers’ Liability Tracing Office to educate businesses to reaffirm the messages given out by their brokers.

Further down the line there is always the possibility that the market will not provide EL cover without an ERN. Given the legal implications for businesses in trading without EL cover, we might all find our trains a bit quieter were that to happen.

Steve Foulsham, Head of Technical Services, Biba