Defining your SME for insurance
The risks to your business can change greatly depending on industry and location, and for this reason many business owners welcome insurers who take a more flexible approach to gaging the size of a business. These clients don't want an 'off the shelf' solution for their company. Instead, they’d prefer to work with their business insurance company to build a bespoke policy, based on an assessment of their sector, size and the sometimes eclectic nature of their business.
Until there is a single, unified definition for SMEs, any company taking out business insurance would be best advised to talk to insurers who specialise in safeguarding small and medium businesses. This will help business owners fell confident that they have understood the subtleties involved, and that they have got the best deal for their company.
However, this is a very general rule. Many insurers do not agree on which criteria should be used to define business size. Some insurers focus exclusively on a company’s turnover, whilst others place the most emphasis on its employee headcount. For some insurers, the key issue is whether the company is owner-run, or whether it’s a subsidiary branch of a larger company group.
As insurance providers draw on this diverse pool of criteria in forming an assessment of a business, it is not always possible to directly compare a selection of business insurance quotes. We’ll leave you with a tip that holds true, whatever the nature of your business: choose the correct levels of cover when taking out your business insurance and make sure you update your policy if your company changes size. This will keep your business covered at an appropriate level.