David Harris of RSA Insurance explains how insurance can save SMEs time and money in the long-run.
There are things so unthinkable that they couldn’t possibly happen to your office or shop, right?
But believe it or not, 20 percent of all small businesses go bust during the first twelve months after starting, mostly due to an unforeseen expense or liability that was uninsured.
And in spite of these staggering figures the penetration rate of insurance among start-ups in the Middle East remains extremely low.
The misconception arises from the perceived cost of insurance, which is often considered to be a major and hence unnecessary expense.
The truth, however, is very different, as David Harris of RSA Insurance explains:
With over 230,000 small and medium-sized companies that contribute more than 40 percent to the country’s GDP, SMEs is the fastest growing sector in the UAE; in addition to being the most significant part of the country’s ability to rebound from any global crisis.
With the support of government initiatives, this sector will continue to contribute effectively to the country’s growth.
Needless to say that the SME sector is of great importance to RSA and we ensure that this is reflected through our associations and business practices.
We have been a part of several SME initiatives for the past two years now and the associations are an integral part of RSA’s vision to support the growth of small businesses in the UAE.
Many small businesses think of insurance as a cost rather than a necessity. The contributing factors to this may include the unavailability of suitable products for small businesses that often leaves insurance low on the list of priorities for most entrepreneurs.
Focus on SMEs has been a crucial part of our strategy for a few years now and this will be a key area we hope to continue growing in. Orientation and education on availability, accessibility, viability and importance remain the headlining attributes of our vision.
SMEs come in all shapes and sizes. When a new business is set up a lot of time, energy and resources go into several areas of development. But insurance is one area that normally tends to take a back seat. According to statistics, it only takes one uninsured loss to get a start-up out of business. So insurance for SMEs is key and just as important (if not more) as it is for larger businesses.
And while there is a perception that insurance is expensive, it is really not. The cost to insure a small business is very manageable and can of course be tailored to specific business needs, allowing them to choose from the covers that address a particular worry or high-risk area concerning their nature of business. This could be property, third party liability, or something else.
Business owners should work closely with their insurer or broker to understand the benefits and tailor make what they need that will offer them the right protection and security for the most competitive price in the market.
With a limited workforce (which is usually the case with most SMEs), time is the most precious commodity, and it’s better spent on growing the core business. A cookie-cutter kind of coverage, identical to everyone else’s, might not give the optimum protection a business needs. That is why we have created a comprehensive SME insurance product with covers that can be tailor-made. This comes bundled with ease of administration, prompt and efficient claims services and a great price.
Insurance for Start-ups can now be acquired for as little as AED 4 a day and it is definitely worth every entrepreneur’s while to consider it as part of the cost of setup.