Tough economic conditions remain the number one threat to the survival of small and medium sized enterprises (SMEs), a new survey has revealed.
Over half of sme owners believe the state of the economy is the major risk to their business survival over the next two years, according to Scottish Provident's latest Business Protection report.
The impact of climate change on the environment, cash flow issues such as late payments, and red tape were all seen as a threat to small firms' survival.
However, while SME owners are most worried by external threats, concern was also voiced over internal threats which could cause problems.
More than a fifth of those questioned believe that there is a 'fairly high chance' of losing one of their key employees to a serious illness for six months or more, and admit it would cause severe problems for the business.
Meanwhile, over half of SME owners stated that the death of a key employee would have a very severe or serious impact on their company.
In spite of this, just a quarter of SMEs have key employee or keyperson insurance in place.
Only a slightly greater number hold partner/shareholder protection products, while just over one in five SMEs have a form of business loan protection.
"While small businesses are showing concern about losing a key worker to a critical illness or death, precious few seem to be acting to safeguard their company in that eventuality," said Susan Barclay, head of marketing at Scottish Provident.
"The statistics are frightening - in a business with four key male employees, there is a 29% chance one will die before retirement and a 68% chance that one will have a critical illness."
As to why small business owners do not have key employee protection products in place, one in five said that they had never thought about taking out a policy.
One in seven have no idea why they haven't taken out such a policy, while six per cent felt that key employee protection is too expensive.
"Our research shows that small business owners need to upskill their knowledge of how to protect their business and their employees, in case illness or death should occur," Susan Barclay added.
"Price should not be a limiting factor, as key employee protection cover has fallen in price considerably over the past decade, and therefore provides small business owners with an affordable option that gives them peace of mind."
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