Classes of Insurance Useful To SMEs

Here are classes of Insurance useful to SME Operators and factors to be considered, bearing in mind that it is a means of protection from financial loss.

Unfortunately, with SMEs, Insurance penetration levels in the UAE are estimated to be around 15 – 20%, far lower than more markets such as the UK. We see that there are holding business owners back from subscribing to these services. The result is that insurance is only considered once the damage is done, or an accident has taken place. RSA is committed to changing this attitude and helping SMEs better understand the value of covering their businesses. With that in mind, here are five important tips that will demystify the process of applying for Insurance.

Break Free Of The Myth
Insurance is not expensive. As small businesses look to cut the costs of running their enterprises wherever they can, there is a common perception that Insurance is too high an expense to bear. The truth is that there are comprehensive packaged business Insurance policies that are available in the market for a very reasonable price. SMEs can bundle the right covers for their businesses into one policy to protect themselves against a variety of risks in one package.Under these schemes, a start-up can avail policies for an average of AED 1000 per year – less than AED 85 a month while a larger SME business can secure coverage for AED 5000 to AED 10000 per year.

Understand The Type Of Insurance You Need.
Once you realise that Insurance is vital and affordable, it’s important to understand what type fits your business requirements. For example, if you run a restaurant, Business Insurance Coverage is critical, but if your company is focused on shipping goods, Marine Cargo Insurance is a more immediate priority.
To accurately assess the policies that are required, business owners need to go through a process of deduction that primarily looks at:
*Assessing the value of the property and the contents of your business and classifying them as critical PR incidental assets.
*Understanding your legal limits and liabilities and noting all perceived and probable risks.
*Recognising any mandatory requirement such as workmen’s compensation Insurance.
While this sounds like a complicated process, Insurance companies do not expect you to be able to cover all these areas on your own. SMEs today have the option of speaking to experts and risk assessors who can make this process simpler and provide a more comprehensive understanding of the covers required to help business owners decide which type of Insurance is right for them.

Growing Business, Growing Insurance Requirements
As with any successful business, growth requires owners to broaden the numbers and types of risks they have to manage. Similarly, SMEs need to regularly examine their Insurance policies to ensure they are covering the expanding scale of their businesses. To do so, it’s recommended that companies get their Insurance Coverage reassessed on an annual basis, which will allow them to take any potential new liabilities into account. Keeping your insurance agent informed of any changes to your business will enable you to recommend the most appropriate additions to your coverage.

Look For Your Ways To Reduce Costs
Another benefit of maintaining a regular dialogue with your Insurance partner is that it will allow them to determine potential saving opportunities about your Insurance policy. Additionally, business Owners should look to keep complete records of their Insurance policies, the premiums they have paid, as well as records of losses and recoveries. This information will help them negotiate better terms for their policies in the future.

Lastly and most importantly, understand and manage various hazardous risks your business is exposed to, which requires continual maintenance and upkeep. Insurance companies will always reward businesses that manage their risks and will also provide special discounts.
SMEs can also take alternative precautionary measures to reduce their liabilities, secure Insurance discounts and lower their premiums. Simple measures like installing fire sprinklers, security systems and /or other safety devices can go a long way.

Picking The Right Insurance Partner.
While Insurance firms have made it simple for SMEs to find and purchase the policies that fit their needs, the right partner can add significant value to a business owner. Agencies that are dedicated to educating their customers rather than looking for the highest premiums are the ones you should look to work with. For example, your Insurance agent should not only be able to support you in terms of securing an appropriate coverage plan, but they should also be able to help you navigate the insurance requirements mandated by the free zone in which you operate and the support you can receive from government entities, such as Dubai SME. At RSA, we are committed to developing long-term partnerships with our clients and have not only invested in designing a proposition that provides comprehensive coverage for SMEs across sectors, but we also work with them to build the knowledge they need to better protect their companies.
Your business is unique and important to you. Insurance is the key that gives you the peace of mind you need against unforeseeable circumstances and enables you to focus on growing your business.