More than one million small companies have been the victim of business crime in the past two years, according to new research by Direct Line for Business.

Vehicle break-ins and thefts from the workplace were the most frequent crimes reported, with more than one-in-ten reporting vehicle thefts or being broken into.

Small firms also complained of internet fraud, with four per cent falling victim to the crime, while three per cent suffered property damage and two per cent damage to tools.

The research, which looked at small businesses and sole traders employing less than five people with an average annual turnover of around £124,000, also revealed that one third of the total crimes against businesses resulted in the company having to make an insurance claim amounting to an average of £2,500.

Jazz Gakhal, head of Direct Line for Business, said: "It's alarming to see that as much as a quarter of small businesses have recently been affected by crime, though unfortunately this is always likely to increase in an economic downturn.

"The research demonstrates the importance of sufficient protection of the business as claims typically average £2,500, and an unexpected bill of this size could put huge pressure on many small business owners.

"Businesses should explore the variety of insurance options available to ensure they have appropriate cover for all sectors of operations."