While insurance companies have been stressing over the implications of a hard Brexit for contract continuity, it turns out small- and medium-sized enterprises (SMEs) are worried they might not even have the means to get insured.
A study by premium finance firm Premium Credit found a link between the prospect of having no insurance and a no-deal divorce between the UK and the European Union, as far as SMEs are concerned. It warned that a poor Brexit outcome could result in major cashflow woes for businesses which, in turn, could lead to their inability to purchase coverage.
“Our research reveals that 61% of SMEs claim to use credit cards, loans, and premium finance to pay for their insurance, but this could increase dramatically if their cashflow is damaged as a result of a no-deal Brexit,” said Premium Credit strategy and marketing director Adam Morghem.
“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.”
Premium Credit’s poll also showed that 45% of SMEs are ‘very concerned’ about managing their cashflow. In addition, 47% believe paying for business insurance has a ‘very significant’ impact on their capacity to successfully manage the movement of funds.
“SMEs already face huge challenges and a poor Brexit outcome could make many of these worse,” added Morghem.
