Small business owners could be taking huge risks with their businesses according to a new survey conducted by the British Insurance Brokers Association. Many of the SMEs questioned had failed to get proper advice about commercial insurance cover.

Commercial insurance cover is a complicated subject and many businesses fail to recognise the difference between receiving information and receiving advice.

The study found that around one-third of SME owners who didn’t use an insurance broker didn’t realise they were only receiving information on a single insurer’s products and were not being advised which policy would best suit their business.
The study found that small business owners are often too pressed for time to read and research all the conditions of a small business insurance policy.

The result is that businesses often find themselves unprotected and unprepared for the risks that face their company. Most businesses find that their insurance policy fails when they need it most – when they need to make a claim.

Eric Galbraith, BIBA’s chief executive, says: “It is clear there is confusion among commercial buyers of insurance, and we have suspected this for some time. It is worrying to think these firms could end up with inadequate or even the wrong cover because they did not receive advice or a recommendation.”

The sheer number of insurance policies available means that business owners have plenty of choice when it comes to purchasing a policy, but many businesses fail to buy the right cover the association warned. This is where the experience of an insurance broker is helpful as they can recommend policies based on businesses specific needs

Insurance brokers take the time to learn exactly what each company needs and provide assistance in the event of a claim.
The research found that the feedback from those who did use brokers was generally positive, with 95% of SMEs saying they are likely to do so again for their business insurance when their policy is due for renewal.

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