SMEs leave themselves open to potential business losses: Aviva

Around two thirds (62 percent) of UK SMEs – equating to around 2,900,000 businesses – may be leaving themselves financially vulnerable without business interruption cover.

New figures from Aviva, the UK’s largest SME insurer, show UK businesses may be burying their heads in the sand and leaving themselves financially vulnerable should they suffer an incident that interrupts their normal business operations.

Despite this, one in five SMEs surveyed by Aviva (21 percent) said they had experienced disruption to their business – it took up to three months for a quarter of them to get back to normal business trading and for the remainder anything up to and beyond two years.

Those SMEs who didn’t have full insurance – two in five (42 percent) – admitted they had to borrow money from friends and family, take out bank loans or use their own savings to fund their recovery after an event that impacted normal trading.

Business interruption insurance can be added to the overall business insurance policy, providing cover for loss of income and helping businesses get back on their feet financially. Whilst buildings insurance would look after the resulting damage of say, a major water leak the impact of such an event might leave the business unable to complete its schedule of orders and this is where business interruption steps in to cover loss in revenue.

Robert Ledger, head of small business at Aviva, said: “We never want to think about the worst case scenario but when it comes to protecting your business, taking a few simple measures now could make a huge difference to your recovery. Ask yourself if you could afford to pay costs like wages from your own pocket until the business is back to being fully operational. If not, you should check you have business interruption insurance included in your policy.”