06 Nov COVID-hit businesses need to review insurance risks
Small and medium sized businesses are the backbone of the British economy and the impact of Covid-19 on their operation goes some way to explaining why Britain now stands on the brink of a “double dip” recession.
In fact, with 5.8 million such businesses in the UK, it would be no exaggeration to say that if they are unable to adapt to the conditions imposed by the global health pandemic, the whole British economy could face a serious downturn and even collapse.
Fortunately, there is plenty of evidence to suggest that SMEs are successfully and ingeniously adapting to the manifold challenges they are currently facing. However, if they fail to do this without also considering how their changed operation models might affect their business insurance requirements, they could be in trouble.
For example, many eat-in restaurants have been forced to move to delivery-only models, and there are reports of distilleries making hand sanitiser, while some clothes manufacturers have started producing PPE.
Whatever the case, any deviation from an established operating model inevitably involves the creation of new risks, and new risks means one important thing: different business insurance cover requirements.
Take the restaurant example listed above, if a business previously only had on-premises public liability cover, they will now need to have public liability cover that takes account of their delivery model. Also, take the example of the distillery that is now producing hand sanitiser, does their business insurance cover take account of the fact that they are selling a completely different product that brings with it a completely different type of risk?
It is easy to understand why many businesses currently carrying out such transitions might look to cut costs or save time by not reviewing their business insurance needs, but ultimately, this head-in-the-sand approach can only be a false economy as it risks leaving the business exposed.
Unfortunately, many businesses are resistant to reviewing and updating their cover even at the best of times. One survey by Aviva found that three-quarters of businesses have failed to update their cover in the past four years.
Review your business insurance risks today
Tredstone are business insurance specialists and can help you determine your business insurance needs, including those that relate to business insurance.
We understand SMEs and the many challenges they face, particularly during these unprecedented times. By working with you and our partners, we can help you ensure that you and your business are covered as you move into the future.
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