RSA survey reveals one in ten SMEs are in danger.
The economic downturn could result in 7% of SMEs reducing their insurance cover to cut costs, a new survey has found.
The research from RSA also reveals that 470,000 SMEs – one in 10 – are in danger of no longer being able to run their businesses.
Suppliers are raising their costs, forcing some SMEs out of business, while others pass on the higher costs to their customers.
Mark Skinner, RSA’s small business director, says: “SMEs are the backbone of the UK economy and are facing tremendous pressures in these uncertain economic times.
“Increasing costs, a decline in consumer confidence and a lack of credit all add to the difficulties they are facing. It is only natural they should look to reduce costs where possible. But they should not cut corners by doing without insurance.
“It is at times like these that businesses are most at risk, with increased recessionary-related events such as theft and criminal damage.”
RSA carried out the survey of 301 SMEs at the beginning of August.
Its findings back up the concerns of Eric Galbraith, Biba’s chief executive, who has asked for a meeting with Baroness Vadera, the business minister, to discuss his fears that small businesses will cut back on insurance cover, leaving them exposed.