Findings from a new YouGov study suggest that many British SMEs decision makers are not clued up when it comes to being adequately insured.
Around 600 SME managers from across the UK were questioned for this survey.
While most were familiar with the core business insurance protection such as public liability, employers’ liability and professional indemnity, there was a considerable lack of knowledge about other important types of cover.
Only 59% of those surveyed believed that stock and equipment insurance was important to have, yet less than half actually had this in place.
An incredible 92% of companies admitted to not having business loan protection in place – leaving them extremely vulnerable should they fall behind with payments.
But the most surprising statistics showed the lack of attention given to protecting key persons within businesses.
Despite 77% of SME owners admitting to the fact that having one of their main employees unable to work for more than six months would have a considerable negative impact on their business, only 40% believed getting their vital members of staff insured was essential.
Concern SMEs are unaware of how insurance can protect their people
In reaction to this research, Royal London, a mutual life, pensions and investment company, has expressed concern about many of the UK’s smaller businesses possibly being under insured.
Debbie Kennedy, Head of Proposition at Royal London’s intermediary division, said:
“We’re concerned to discover how awareness of business protection varies so widely among SMEs – many are woefully under-protected and uninformed about their options.
“For example, we found they are protecting their stock and equipment, but not factoring in cover for their key personnel. Running a business is relentless; when there are hundreds of priorities it can be hard to know what needs to be insured and what doesn’t.”
Ms Kennedy recommends that businesses seek expert opinions in order to understand all of the options on the table regarding their insurance cover.
“We urge SMEs to make time to understand the options, so they can put the right cover in place – to effectively safeguard their business,” she added.