SME owners worried about affording insurance after Brexit

Robert Brown • July 30, 2019

Whilst the immediate furore surrounding Brexit has calmed down with a further delay agreed with the European Union until 31st October, owners of SMES (small-to-medium enterprises) are said to be concerned that a non-favourable exit from Europe could leave them without the financial leeway to afford appropriate insurance.


That’s what financial firm Premium Credit discovered with their research earlier this year, with their suggestion that there exists a link between the No Deal scenario and an inability to purchase insurance coverage for their business.


“Our research reveals that 61% of SMEs claim to use credit cards, loans, and premium finance to pay for their insurance,” offered Adam Morghem, strategy and marketing director for Premium Credit. “But this could increase dramatically if their cashflow is damaged as a result of a no-deal Brexit.


“SMEs could see the goods they buy becoming more expensive; they may have to spend more on stockpiling , and the cost of storing this could also increase. All of this could make it harder to pay for the essentials needed to run their operations – from paying staff salaries, rent, and insurance.”


There’s certainly an argument that not all SMEs will experience a debilitating effect in the outcome of a poor deal, but the concerns of being unavailable to afford insurance are certainly a concern for the industry. 5.6m small businesses are operating in the UK as of the start of 2018, employing a total of 16.3m people with a turnover of £2 trillion last year.


Whilst we appreciate the challenges of operating in an uncertain market, we would urge all SME owners to prepare for the worst potential outcome this October and attempt to save appropriately for their insurance. If Brexit does not curtail your income significantly, all it takes is a small mistake, such as an accidental fire or error during your daily operations for your enterprise’s ability to trade to be in danger, leaving you at risk of a crippling lawsuit.


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