A new FSB report has raised many questions about just how well the insurance market is performing for small businesses, micro businesses, and self-employed people across the UK.
The publication, Paying a premium? Reforming the insurance market to work for small firms, has found that:
- Three in five small businesses have seen their insurance premiums rise in the last year
- Three in ten say they find it hard to understand what their insurance covers
- One in six (16%) who have renewed or switched their policy in the last year say that their cover has been restricted.
Responding to the report’s findings Roger Pollen, Head FSB NI said:
“The problems that many small firms are experiencing in their dealings with the insurance market are widespread. The rise in premiums during the past year alongside the suitability of products currently being offered lies at the heart of the issue.”
“The increases are pushing many SMEs to the limit. As a result, many hospitality firms in particular in Northern Ireland are being forced to pass on higher costs to customers or to cut back on investment.”
“Small and micro businesses act more like individual consumers in the way that they buy insurance and the knowledge they have of insurance products and law.”
“It is therefore vital that policies are communicated in a clear and uncomplicated way so that business owners are better able to assess the cover they are getting.”
Continuing, Roger Pollen said:
“As firms continue to deal with surging input price inflation, rising energy and fuel costs and tax increases, it is essential that action is taken to make insurance easier and more cost-effective for small businesses to access. Given that insurance is an integral part of business resilience, this will enable small businesses to compete on an equal footing."
The report contains multiple recommendations for insurers, regulators and the UK Government on how to resolve and improve many of the difficulties facing small businesses around insurance. One of the key asks is that the government should work together with insurers and the Financial Conduct Authority as the regulator to agree specific conditions for forms of Government support that should not be considered when calculating business interruption insurance claims.
Ends
- Paying a premium? Reforming the insurance market to work for small firms - FSB report, July 2022
- FSB surveyed 819 small business owners over January 2022, and carried out video focus groups and interviews over January and February. Findings were weighted to make them representative for FSB's membership.
Media Contact: Shauna McKeown, Head of Communications, FSB NI
Email: [email protected]
Telephone: 07917628904
