It might not be exciting, but small business insurance is vital, in particular given the heightened risks that firms are currently facing. Safety nets have never been so important. The big question is, how can businesses afford the coverage they need?

Small business insurance essentially falls into two camps – must-have policies and ones that are notionally optional (but that firms really should have). Employers’ liability insurance is a must if a firm has employees, as is public liability insurance if customers and suppliers are coming to a business. Some firms – lawyers and accountants for example – also need professional indemnity insurance.

As for the other category, cyber insurance is a very topical example. Numerous studies have shown that smaller firms are struggling to put an appropriate level of cyber-security in place, including cyber insurance. This sluggishness comes with a sizeable risk – cyber-attacks can be very costly and even fatal. Firms may also need to consider buildings insurance and product liability insurance, depending on what they do, how they do it and where they do it.

Why are these policies important? Because small business insurance provides reassurance and conveys professionalism, and if something goes belly up, it’s good to have an insurer in your corner. However, coverage comes at a notable cost.

Small business insurance and how alternative finance help

Given the current climate and the pressure on margins, it is understandable that smaller firms may hesitate when it comes to expanding insurance coverage – as can be seen in the current trend in cyber insurance. Finding extra cash to strengthen insurance policies is challenging. But it’s important and this is where alternative finance can help.

Services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses in a funding climate characterised by prolonged caution from traditional lenders. Indeed, the issue has returned amid highly challenging post-Covid-19 market conditions, with bank loans to SMEs falling by £14 billion in the year to March 2023.

These alternative finance facilities, which offer a more easily accessible, affordable and personalised approach to lending, are helping small businesses survive and target recovery, stability and growth. Notably, alternative lending played a prominent role in the government’s headline emergency support schemes.

This profile has helped cement the reputation of alternative finance in the business sector, with a recent study showing that more than 50% of small businesses are looking to use finance to achieve growth in 2023.

Strengthening insurance coverage and small firm finance options

Against a backdrop of a high level of market risk, it is critical that smaller firms protect themselves as much as possible, and small business insurance is a key part of this safeguarding. It is vital that firms find the capital to invest. This is why it is essential that business owners are aware of all the funding options available to them, including the services of alternative lenders.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.