Should the cost of SME insurance determine the cover I buy for my business?

A survey in 2017 showed that the cost of cover was the number one reason for businesses buying their SME insurance.

The survey said that 61% of businesses had it in their top three reasons for choosing their cover.

Just 38% of businesses said the scope of cover was in the top three reasons for purchasing their SME insurance.

The problem with this statistic is that it leads to a crisis of under insurance in the SME sector.

Price alone is not the reason to choose your cover.

What should my SME insurance cover?

There are six key areas of insurance to investigate before you choose the right cover for you.

1. Fire and theft– While they are contained in most policies, do you have the correct level of cover for your business needs? Does it cover expensive pieces of equipment or stock generally, or should you detail them on the policy? You may find your business losing out if everything isn’t covered as you thought.
2. Professional indemnity– If yours is a service-based business, your advice and opinions may be the bedrock of your offering. What happens if that advice fails a client, or they perceive that it has failed them? This type of cover protects you in those circumstances. Make sure the level of indemnity is right for your business. If you’re a consultant in logistics dealing with multi-million pound supply chains, you may need more cover than someone who is a marketing consultant in the SME sector, for example.
3. Public and employer’s liability– If you have staff and customers coming on to your site, or you go out to work with people, you need public liability insurance to cover any accidents or problems they have on site and any impact you may have on their site. The cover level you need depends on the work you do, and the compensation demands you may face. Most businesses have cover of between £1 million and £10 million.
4. Goods in transit– If you’re in retail or logistics, this cover is important to protect your products while they are being shipped. The cover will depend on the value of the products shipped and the security during transit.
5. Business continuity– If things go wrong, does your cover pay for extra staff, equipment, or a rented site to allow your business to continue operating?
6. Property insurance – Does your SME own property? Make sure it is covered for all eventualities. Talk to your broker about the fire and security measures on site to get the correct premium.

Need advice on getting the right cover for your SME? Our Severn Bay team of independent brokers with access to the whole of the market will help you get the right insurance products to ensure you’re properly protected. For more information please contact us on 029 2047 0375.