The mutual says the findings of its survey, among 600 senior decision-makers, highlights a lack of understanding about how SMEs can protect themselves.
The survey, by YouGov, found almost a third (30%) of respondents hadn’t heard of ‘Partner’ (or shareholder) protection. More than half (55%) had heard of it but said their business does not have it in place. Meanwhile, almost a quarter (24%) confessed they hadn’t heard of ‘Business Loan’ protection and worryingly, very few (8%) said they have this kind of insurance in place.
Royal London is concerned that British SMEs are unaware of how insurance can protect different assets – people as well as goods. The research found over two fifths (44%) insure their ‘stock and equipment’ - over half (59%) said protecting stock and equipment was ‘important’, yet significantly fewer (40%) respondents felt that ‘key person’ cover was ‘important’.
The majority (77%) of those surveyed admitted that if a vital employee fell seriously ill, and was unable to work for more than six months, it would impact their business. In fact almost one in three (31%) predicted the impact would be ‘severe’. Despite this, over half (58%) confessed they have heard of key person but said their business does not have it in place – leaving their most vital staff unprotected.
Debbie Kennedy, Head of Proposition for Royal London’s intermediary division, said:
“We’re concerned to discover how awareness of business protection varies so widely among SMEs –many are woefully under-protected and uninformed about their options. For example, we found they are protecting their stock and equipment, but not factoring in cover for their key personnel. Running a business is relentless; when there are hundreds of priorities it can be hard to know what needs to be insured and what doesn’t. Getting an expert opinion will help a business put adequate protection in place. We urge SMEs to make time to understand the options, so they can put the right cover in place – to effectively safeguard their business.”
The research comes as Bright Grey – part of the Royal London Group - launches its new Business Protection Planner at businessprotectionplanner.com.Designed to raise awareness of the need for business protection, the Planner is aimed at advisers who are new to the protection market. It offers support to advisers throughout the journey, from identifying opportunities and providing the right cover for their client to setting up a plan.
Debbie continued:
“Our new Business Protection Planner is designed to help advisers grow their business. It explains the business protection process step-by-step, and outlines why business protection is relevant to many clients. It also illustrates how opportunities could exist within their current client bank, and provides advisers with the tools they need to start the sales conversation.”
