Why SMEs need to watch their documentation
Having business insurance is just as important for many companies as their assets, as it is what protects them should something go wrong.
But new research has shown that many firms do not keep track of their insurance, or are even unaware of what is covered by it.
According to the British Insurance Brokers’ Association, many small and medium sized enterprises do not read their policy documents, with 29% saying they don’t read the entire document.
Only one fifth of business owners were found to do this, while 47% just read the policy summary – despite key information often not being included in it.
The issue extends beyond just insurance documents according to the survey, as 26% of small business leaders revealed they do not read their bank account terms and conditions.
Similarly, only 23% said they read their hire car contracts, suggesting that they may not be entirely aware of the financial situations relating to their businesses.
This lack of preparation could prove disastrous should an issue not be covered by a policy when an owner actually believes that it us – especially if it results in financial costs or losses.
Small businesses are widely regarded as being the backbone of the UK economy so ensuring that firms understand their paperwork is essential.
A failure to do so could result in difficulties in the long term and in severe cases could lead to problems that are not easily solved.
Business recovery options do exist in some instances but firms are encouraged to be proactive and to ensure that they do not take unnecessary risks.
Essentially, the business documentation is just as important to a firm as anything else and since each document will vary by provider, reading them and understanding them is vital.
This means paying exquisite attention to detail and ensuring that the small print of a policy covers everything that is needed.
Some simple checks could prevent negative situations from occurring so businesses with a firm eye on growth should ensure they are prepared.
By Phil Smith