As an SME how do you arrange your insurance? And how do you ensue with certainty that you have sufficient insurance in place to protect your business if the worst were to happen?
If these are areas that concern you and your business, then we take a look at the value an SME insurance broker can add to your business.
What insurance is available to SME’s?
There is a wealth of insurance policies available to SME businesses. Which you take out will depend on your business, the services that you provide as well as legal requirements.
Some of the covers you may want to consider include:
- Professional indemnity insurance
- Public liability insurance
- Employers liability insurance
- Product liability insurance
- Business interruption insurance
- Legal expenses cover
- Terrorism insurance
- Cyber insurance
- Intellectual property insurance
How can SME insurance be arranged?
There are many ways to arrange your SME insurance. As with other types of insurance you can:
- Buy direct from an insurer
- Buy via a comparison site (e.g. money supermarket, Go Compare etc)
- Work with a broker to arrange your insurance
Historically the way personal insurance policies such as car insurance and home insurance have been increasing purchased, comparison sites are now looking to enter the small business insurance market. It is thought that there is currently disintermediation happening in the area of SME insurance (something Anthony Jones director Steve Green spoke about at a recent event). That is more policies are available via the comparison site route. This puts more emphasis on price and making this a key factor in the decision-making process.
But when it comes to something as important as your business and livelihood should the focus be on price? At Anthony Jones we understand as a small business your financial resources can be stretched at times, but we firmly believe that investing in the right insurance and the right level of insurance is critical in ensuring your business continuity. And , when it comes to something as complex as insurance for your SME business, decisions made solely on price can be a false economy.
Why consider using a broker to arrange SME Insurance?
Small business insurance is complex. It is more complex than a standard car or home insurance policy for example.
New risks for businesses are emerging all the time. Take cybercrime as an example. It is thought that over half of the cyber-attacks reported worldwide area against businesses with less that 250 employees. Yet only 11% of businesses are thought to have a specific cyber insurance policy in place according to ABI figures. Why is this the case? Is it because small businesses do not understand the risk of cybercrime, do not know cyber insurance is available or do not value the cover?
Or the risk of terrorism? If your business is in an area affected by a terrorist attack and you do not have non-damage business interruption terrorism insurance in place, your business could suffer. If your business is caught behind cordons that are put in place, if you suffer from loss of public utility and reduced footfall, then your business could be seriously and detrimentally affected. Yet, only 3% of SMEs are thought to buy cover against acts of terrorism.
Brokers are well positioned to understand these risks – working with a range of clients and a range of insurers they have a wealth of information to tap into. This can then feed into the way that they work with you and provide advice for your business.
As a business owner you have experience of your own business but may not be aware of emerging risks or you may downplay the exposure your business has to such risks. This in turn can impact your insurance buying decision. A broker has the experience of many businesses and the realities of claims experience – costs, valuations and the real length of time it takes businesses to recover from events such as flood or fire.
And this is where brokers vary from comparison sites. The focus will not just be on price. Yes, a broker will work to get you the best price possible. But they can also offer advice. Not just on the insurance covers which will be needed to protect your business but also on risk management and what you can do as a business to minimise your risks to certain perils.
Brokers such as Anthony Jones will not charge for providing you with a quote or for the advice that they give. This is a real benefit to you. If your business is your livelihood then it is vital that you protect it. And the best way to do this is to be as informed as possible about the insurance covers that you are buying and the risks your business may face.
Of course, the most important thing is to choose your broker wisely. Make sure they are regulated by the FCA and that they invest time and effort in understanding you and your business. All things that we value and put at the heart of our service at Anthony Jones.
There is a page on our website about the value we believe that Anthony Jones bring as a broker. So do give it a read if you are thinking about working with a broker or want to understand more about the role brokers can play in arranging insurance.
What are the potential downsides of not working with a broker?
Getting the wrong insurance, missing vital cover or not getting enough cover can be devastating to a business.
Not having enough insurance in place to cover your assets or business is known as underinsurance. And this can be devastating to a business. Particularly to SMEs who may not have the financial resources to cover any shortfall in insurance cover.
For example, it is estimated that as many as 40% of businesses who have a business interruption policy in place do not have sufficient cover.
If you make your decision based purely on price or do not do your research properly and do not invest in the correct insurance policies, then you could find yourself and your business in a difficult position if disaster should strike.
A broker has the benefit of having worked with many businesses and having seen first-hand how different disasters impact them. From areas including how long it really takes to recover from an event such as flood or fire to the growing number of cyber-attacks impacting SMEs . These factors can all feed into the types of insurance and how much insurance you require. Without this background knowledge, it is easy to see why businesses can find themselves in a position of underinsurance.
In today’s world, businesses must be available to their customers 24/7. So, if your business faces a period of downtime as the result of a disaster event you need to be in a position to ensure that this downtime is as short as possible. Insurance will inevitably be a key part of this. And this is why is its vital for the survival of SMEs that they choose the right SME insurance covers and the right amount of insurance.
Working with a broker who specialises in SME insurance can give you access to a wealth of experience in the insurance market as well as people who can advise on risk management. If you have any questions about SME insurance, then don’t hesitate to get in touch with us at Anthony Jones today on 020 8290 9080 or email us as business@anthonyjones.com
