The Lockton guide to the A, B and three Cs of Insurance Issues facing SMEs

For small and medium enterprises insurance is an often-overlooked subject, only examined in a cursory manner at renewal. However, if you have not looked too closely at your insurance coverage recently, it is time to talk with the experts at Lockton who strive to protect you and your business from the myriad liabilities which you may face daily.

Lockton’s Commercial Insurance Consultants Kieran Hurley and Brian Mullen

As a rough guide to get you thinking about the correct commercial cover for your business, Lockton often refers to the A, B, and three Cs of insurance.


At the start of 2016 a record 5.5 million private sector businesses were recorded. The Financial Conduct Authority found that as many as 40% could be underinsured. One of the most common problems is underinsurance on the buildings sum insured, which can lead to a reduction in any claim’s settlement figure. In practical terms, if your building is worth £200,000 and you insure it for £100,000, you are only insuring 50% of the value at risk, meaning in the event of any building loss, the claim settlement will be reduced by 50%. The effects of this can be catastrophic on SMEs meaning the lower initial cost will be far outweighed by the price of under-insurance.


The UK’s withdrawal from the European Union could severely impact SMEs directly if they wish to export and trade to jurisdictions which may have restrictive tariffs or conditions of entry. This could result in requiring an insurance policy which responds in the courts where the action is taken. It is important to know where to look for this in your policy and why this is important. If you are exporting any goods or services across a border or tendering for a contract within another jurisdiction you should have a trusting insurance partner on side to assist and advise you.


Insurance products are becoming more commoditised while insurance companies encourage clients to self-serve via the internet. Paradoxically, SMEs and the insurance issues they face are becoming more complex. This is where the skills, knowledge and expertise of the team at Lockton comes in. We know and understand the local, national and international worlds of insurance, bringing added value to your coverage in the form of our experience and personal service.


In 2014, just 2.4% of UK SMEs purchased cyber insurance. According to Global Data, this figure increased to 13.7% in 2016. Lockton supports clients by providing tailored cyber insurance in conjunction with trusted professional risk management advice. We offer direct access to trusted insurance advisors and our experienced risk management team who can assist you with everything from risk audits to health and safety policy statements.


Research shows that price is a driving factor for SMEs when choosing insurance. Around 39% of the UK’s 5.4 million SMEs see rising business costs as a top three risk to their business. We advise that you speak with experienced insurance professionals and allow Lockton to secure the correct cover for you.

For more information on insurance issues facing SMEs today contact Lockton’s Commercial Insurance Consultants Kieran Hurley,  [email protected] or Brian Mullen [email protected]

Share This: