The FINANCIAL — Unfortunately, there are a few business owners who get just enough cover to feel comfortable, without actually getting the coverage they really need.
There are also those that only get insurance cover only where it is legally mandatory, whilst leaving the rest of their operations vulnerable.
Lately however, there has been a surge in the number of Business Insurance Policies being taken out. Mr Graham Webster, the Managing Director of Bolton’s aba Group stated: "Following a government backed scheme to promote cheaper lending to SMEs, many business owners are using Business Insurance Policies as a means to protect their investment. As part of the National Loan Guarantee Scheme, banks will be offering loans at a 1% discount on their standard rates for businesses that meet the criteria. Some £5 billion, guaranteed by the government has been made available to SMEs in the first instance with up to £20 billion to be provided over the scheme’s two year period. Whilst useful for aiding economic growth, loans still pose a risk to any business and so all eventualities need to be catered for. Unfortunately, there are some business owners who have been taken in by the television advertising and have chosen their own policies online or have bought their insurance over the phone. The problem here is that business owners with little or no knowledge of business insurance are making decisions on cover that may or may not help them with things turn sour; what’s really needed is expert advice so that this cover pays out when it is sorely needed".
All businesses are different and so each will have varying instances and levels of risk, which can only be truly covered by a business insurance policy that includes tailored wordings.
"As an example, there a number of ’home business’ insurance policies available online, but a web developer may work from home, and so may a maker of soft furnishings. If a web developer causes irreparable damage to a website resulting in a loss, they may be sued for negligence; if someone sits on a cushion that still has a pin in it, they may claim for personal injury. The risks faced by these businesses are very different and so the selling of very generic policies can be harmful to smaller businesses; because there’s a good chance that they may not be able to make a successful claim in their unique circumstances. It’s imperative then that business owners consult with a professional and experienced Business Insurance Broker so that they can invest in a policy that works in their best interest".
According to WebWire, if this surge does consist of generic business insurance policy sales, the result could be time bomb waiting to sink businesses in their time of need. So for those looking to protect their investments after securing discounted capital; a reputable Commercial Insurance Broker should be their first port of call.