In work undertaken by BIBA as a result of the FCA’s concerns around under-insurance for SMEs the BIBA Claims Working Group highlighted two key points.
Firstly the importance for most businesses of having, as a minimum, a two year indemnity period for BI. Secondly, where appropriate, the need to promote the importance of using declaration linked BI cover. This provides an uplift of 33% of the declared sums insured, provided
the estimated sums are correct to start with. Both can give significant buffers to a business.
Federation of Small Businesses (FSB) National Chairman, Mike Cherry:
It is vital small businesses aren’t left in the lurch when the worst happens. We would encourage all small firms to make sure their current insurance arrangements offer suitable protection, to mitigate the risks of business failure or constricted cash flow resulting from unexpected costs.
The BIBA under-insurance guide will be a helpful tool, especially for all those businesses that are currently under-insured.”
