| Link(s): | New guide to help SMEs navigate insurance needs | ABI smeinsuranceguidejanuary2026.pdf smallbusinessbigrisktacklingsmeunderinsurancejanuary2026.pdf |
Context
Following on from its recent commentary in relation to SME uninsurance and underinsurance, the ABI has announced that a new Guide to help SMEs navigate insurance needs and address gaps in coverage. The article announcing the Guide also includes a link to a report titled “Small Business, Big Risk: Tackling SME Underinsurance”. The guide breaks down the different insurance products and requirements for SMEs, stating that “a lack of insurance, or inadequate insurance, can be catastrophic”.
Key points to note and next actions
- The new Guide sets out simple steps for business owners (and their insurance brokers in assisting their SME clients) to consider when taking out and renewing business insurances.
- The Guide has been developed in response to findings from research conducted by Public First, and commissioned by the ABI, which highlights how large numbers of SMEs are either uninsured or underinsured.
- A report, “Small Business, Big Risk: Tackling SME Underinsurance” found that many SMEs have not taken out appropriate insurance for the risks they may face. For example:
- while 48% of respondents said their business had a physical premises, of those only 23% had business interruption insurance;
- 57% have portable electronic equipment but only 31% have commercial contents insurance;
- 57% of respondents said they had software or cloud services, but only 29% had cyber protection insurance; and
- only half of respondents said they had reviewed the types of insurance they hold or their level of cover in the past 12 months
The report and Guide make several recommendations for industry, regulators and government to address the challenge, including:
- Insurers, intermediaries, business bodies and government should work together to raise awareness and understanding of risks facing SMEs and the benefits of insurance, by running a time-limited engagement campaign.
- Insurers should continue to review the design and presentation of products for SMEs with the aim of securing stronger customer understanding, better tailoring of offerings and higher take-up.
- Insurers, brokers and price comparison sites should continue to refine customer journeys to support clearer understanding of needs and appropriate cover choices.
- Insurers, brokers and price comparison sites should improve processes for reviewing and renewing insurance so that renewal on current terms is not the default.
- Brokers should further promote their offer to SMEs, focusing on high satisfaction and the benefits of personalisation.
- Insurers, business bodies and government should work together to make the strategic economic case for SME insurance.