Email a collegue.| Headline: | SMEs chronically under-insured |
| Description: | According to the results of a recently published survey, commercial insurance brokers think their SME clients are under-insured.
Around half of the brokers who responded to an AXA Insurance survey said they believed their clients did not have enough insurance for their working premises. According to AXA, 55% of brokers claim their clients need more cover for their motor fleets, and 56% of commercial brokers interviewed felt that their clients were "under-insured with regards to protecting themselves against any loss of income that might occur as a result of a disaster striking such as a fire or theft of stock on a large scale". In addition, one fifth of brokers felt that SMEs needed to increase cover for their premises by between 11% and 20% and one in four said that they needed to increase their insurance for loss of income by the same level. Reasons cited for under-insurance included: reluctance to pay the correct premium lack of understanding of cost of assets lack of understanding of insurance poor risk management practices. But David Bishop of the Federation of Small Business said that the findings were "a sad reflection on the insurance industry." He added that it was the responsibility of brokers and advisers to ensure their clients understood what their risks and requirements were. "Businesses are heavily reliant on their brokers for advice. The relationship between businesses and their brokers should be like a partnership," said Bishop. He added that "a very real concern" was the issue of employers' liability. He said, "A significant number of employers can't find [employers' liability] policies at a price that they can afford." Asked where businesses should go for impartial advice on their insurance needs, Malcolm Tarling, a spokesperson for the Association of British Insurers told AccountingWEB that while the Association could provide general advice, "the first port of call should be the brokers or advisers." Tarling acknowledged that the cost of liability cover was a concern, and that it was something that the insurance industry was exploring. But, he said, ultimately it was a matter for business, and that well-managed businesses should be able to find affordable policies. |
| Date: | 23.02.2005 |
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