Lack of cash is causing small businesses to cut corners acording to a research led by RSA Group.
With many small businesses struggling to secure loans from financial institutions and new research from leading insurer RSA showing that the recession has led small businesses to scrutinise all expenditure down to the last paper clip, the insurer fears that some will cut corners on their insurance cover. It warns this is extremely unwise in the current climate and firms that do this will ultimately pay a heavy price for poor risk management.
RSA’s research found that the recession is driving key changes in business behaviour. There is an enhanced scrutiny of costs and overheads to ensure value for money is achieved. Given this, small businesses may consider cutting corners on their insurance cover on the grounds that they may not have made any recent claims and therefore underestimate the risks they now face.
In these unpredictable times, insurance is even more important than before and all small businesses should ensure they are adequately covered for:
- Business interruption – revenue and reputation are incredibly valuable at this time. If anything were to happen to prevent a business from trading, the owner would want immediate support to get back up and running again without extensive cost
- Professional indemnity – the recession has made Britain a more litigious society and therefore professional failures or mistakes that may have gone overlooked a few months ago are being challenged now
- Contents cover – as in previous recessions, a rise in unemployment tends to lead to an increase in incidents of theft
In addition to providing these covers and risk management advice, all of RSA’s products come with a monthly interest-free direct debit installments option, to help make budgeting easier.
David Greaves, Director of Small Businesses at RSA, said, “All businesses face a large number of issues on a daily basis, regardless of their size. A small business can be left vulnerable to many risks and with the loss of their livelihood a very real possibility, failure is not an option.
“RSA’s know how in this sector has allowed us to build up a clear understanding of these issues and that is why we are calling on small businesses to be aware of the risks they face and ensure they are adequately protected.”
