In a new Hiscox study across six countries, British SMEs showed most understanding of insurance. Over half (53%) of UK SMEs said that they fully understand the range of insurance options available – compared to 40%, the average for the other five countries (US, Germany, the Netherlands, France and Spain).
The study – ‘DNA of an Entrepreneur’ – commissioned by specialist insurer Hiscox, also found that following the August riots, 15% of UK SMEs identified civil unrest that causes damage or interruption to their business as a major risk but one that they did not currently insure against.
The research, which surveyed 500 UK SMEs as part of a wider study of 3,000 European and US SMEs, also indicated that nearly a third (30%) of small to medium-sized businesses only buy the minimum essential cover required (whether for their property and transport, or insurance required by law such as employers’ liability).
SMEs also listed the major risks to their business that they do not currently insure against. The risk of not being paid by clients came top at 57% (this was particularly high for the IT and media sectors at 71%). Being sued by a client (23%) was the second highest uninsured risk on their list, with damage to premises or stock, and death or disability of key staff both at 18%.
Commenting on the findings, Alan Thomas, small business expert, at Hiscox said: “The insurance industry in the UK has a strong heritage and it is good to see that our SMEs are ahead of the game globally in their understanding of risk and insurance. However the industry still needs to work hard to effectively communicate risk management information to SMEs, particularly in these tough economic times. Only 11% of UK SMEs in the research said they currently look for risk management advice from their insurer and broker – revealing a great opportunity to become the go-to point of contact for entrepreneurs on how to mitigate risk.
“It is also worrying that some SMEs are taking big risks with some of the more traditional threats to their business such as not insuring against the loss of equipment or stock (20%). This might well be a feature of the downturn as firms look to cut back on operating costs, but it is a false economy should the worst happen.
“Given the huge role that the SME sector will play in the UK’s economic recovery we must, as an industry, do more to help SMEs fully understand and manage the wide range of risks they face.”
Global comparison: I fully understand what insurance is available to me and what risks I can cover
|
All |
United Kingdom
|
USA |
Netherlands |
Germany |
Spain |
France |
|
43% |
53% |
43% |
49% |
37% |
36% |
36% |
|
