Findings from the Norwich Union Business Protection survey show that a market downturn and customers defaulting on payments are the main causes of stress, cited by 46 per cent and 30 per cent of SME owners respectively. The research also found that 23 per cent said they were additionally concerned by rising utility bills.
Norwich Union suggests that the data shows managers are increasingly looking to negate those risks that are within their control as anxiety over market conditions intensifies. It points out that 45 per cent of respondents now have some form of business protection insurance covering, amongst other things, the salary or life of a key employee. This compares with only 38 per cent who have their own life insurance and 20 per cent with health or dental insurance. 61 per cent of respondents have cover for premises or equipment.
When asked to rate the most important insurance product for their business, nearly five times as many managers of SMEs thought it was more important to protect against the loss of a key employee than insure their own life. 15 times as many owners believed business protection insurance was more important than health/dental insurance – although less than half have actually taken out business protection cover.
To help advisers address this sector, Norwich Union is launching a dedicated online Business Protection Toolkit, which includes advice and guidance on the products available. The toolkit can be found at www.nubusinessprotection.com.
Trevor Bailey, director of protection at Norwich Union, says: “The recent growth in demand for business protection is impressive, but the potential is extraordinary. The market for life cover alone was estimated by Swiss Re in 2005 to be in excess of £500bn. But confusion reigns with nearly 75 per cent of those surveyed admitting to a lack of understanding about business protection cover and products.”