Seven essentials of SME insurance..
Insurance is an absolute must-have for small business owners, and business pack is the default choice for many of them.
It’s convenient to arrange and simple to deal with because, as the name suggests, a business pack is essentially a bundled product designed for SMEs and micro-SME clients.
The typical risks every SME operator faces could be arranged under one roof in a standard business pack. Property, business interruption, liability, employee dishonesty and machinery breakdown are among the items usually included in such policies.
In an ideal world, having a business pack in place would suffice. But in the real world that’s not how it works most of the time. Far too many business owners mistakenly assume a business pack provides all the protection their operations require.
The question of whether the bundled product is suitable hardly pops up.
Such tendencies can be dangerous. As the survey findings from the Vero SME Insurance Index this year puts it: “Those who know insurance well understand how intricate it can be – but the research has found that SMEs don’t necessarily feel the same way.”
Three-quarters of SMEs interviewed for the survey claimed it was easy to assess what insurance their businesses need. This extends to evaluating appropriate levels of coverage. Just as you rely on a plumber or electrician, or doctor or accountant when things get complex, you’d be wrong if you thought insurance is so simple that all any business needs is a generic insurance product that’s good for everyone. Do you really understand the risks your business faces?
Do you really know what it would cost to get your business back on its feet? Assessing and dealing with the unique risks your business faces is a complex task that requires professional advice from a qualified insurance risk adviser.
So instead of flirting with under-insurance or getting the wrong bundle of policies, why not set aside some time to work with us on the essential sorts of cover your business really needs?
For example, here’s seven critical areas your business cannot afford to ignore:
1. Public and products liability insurance
This protects you and your business should it be found to have caused physical injury or damage to a third party.
2. Property insurance
Your business premises and assets such as computers, inventory and tools would be covered in the event of a fire, vandalism, theft, smoke damage and other perils.
3. Business vehicle insurance
Practically every business needs to own a vehicle, whether it’s for goods delivery or to meet clients. So don’t go without the proper insurance for it that covers damage to the vehicle, damage to third party vehicles, emergency repairs and replacement should there be a total loss.
4. Professional indemnity insurance
This is most common for professionals who offer advice in the course of their work. Taking this cover offers financial protection in cases involving breach of professional duty.
5. Directors’ and officers’ insurance
Senior managers might have the ability to make game-changing decisions for the business, but what happens if the decisions they make have negative results and trigger a lawsuit? This type of insurance covers legal costs or damages from a legal action.
6. Cyber insurance
No business today can operate without email. And with technology comes criminals, who see SME businesses in particular as easy prey. Cyber cover protects you against losses.
7. Tax audit insurance
The tax office is stepping up its random audits of businesses. If you get the call, this can disrupt your daily operations and add some significant costs to your business. This cover indemnifies your business for professional accounting fees should the taxman come calling.
So as you can see, a one-size-fits-all business pack probably isn’t likely to be the total answer to transferring your business risks. It requires a close understanding of the risks and the costs, to ensure full coverage and a meaningful claims payout. That’s why risk advisers are recognised as an essential assistance to businesses of all sizes. We’re here to ensure that when misfortune happens, your business doesn’t suffer.
This article originally appeared on Adroit Insurance & Risk Blog and has been published here with permission.