Many decision-makers in small and medium-sized enterprises (SMEs) are unsure how their businesses is protected or what type of cover it has in place, according to new research by Royal London.
The mutual says the findings of its survey, among 600 senior decision-makers, highlights a lack of understanding about how SMEs can protect themselves.
The survey, by YouGov, found that 30% of respondents hadn’t heard of ‘Partner’ (or shareholder) protection. 55% had heard of it but said their business does not have it in place. Meanwhile, 24% admitted that they hadn’t heard of ‘Business Loan’ protection and only 8% said they have this kind of insurance in place.
Royal London is concerned that British SMEs are unaware of how insurance can protect different assets – people as well as goods. The research found that 44% insure their ‘stock and equipment’ – 59% said protecting stock and equipment was ‘important’, yet 40% respondents felt that ‘key person’ cover was ‘important’.
77% of those surveyed admitted that if a vital employee fell seriously ill, and was unable to work for more than six months, it would impact their business. 31% predicted the impact would be ‘severe’. Despite this, 58% confessed they have heard of key person but said their business does not have it in place – leaving their most vital staff unprotected.
Debbie Kennedy, head of proposition for 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. Getting an expert opinion will help a business put adequate protection in place. We urge SMEs to make time to understand the options, so they can put the right cover in place – to effectively safeguard their business.”