New ABI Guide Highlights a Growing Risk for SMEs: Are You Properly Insured?

A new guide from the Association of British Insurers has put a spotlight on a critical issue facing UK businesses: many SMEs are either uninsured or underinsured - and don’t realise the risk they’re carrying.

For a sector that represents 99% of UK businesses, the implications are significant.

The Underinsurance Problem

The ABI’s research reveals a clear gap between the risks businesses face and the protection they have in place.

Key findings include:

• Only 23% of businesses with premises have business interruption cover

• Just 31% insure their portable equipment 

• Only 29% have cyber insurance, despite widespread reliance on digital systems

• Half of SMEs haven’t reviewed their cover in the past 12 months 
  

This points to a widespread “set and forget” approach - where policies are renewed without being updated to reflect how the business has evolved.

Why This Matters

When things go wrong, inadequate insurance isn’t just an inconvenience - it can be catastrophic.

From property damage and liability claims to cyber incidents and operational disruption, the financial impact of being underinsured can threaten the survival of a business.

As risks become more complex - driven by digital reliance, economic pressure, and changing working models - having the right cover in place is more important than ever.

What the ABI Guide Recommends

The new SME insurance guide is designed to simplify what is often seen as a complex area.

It encourages businesses to take a more proactive and informed approach by:

• Understanding which policies are legally required and which are essential

• Reviewing insurance regularly to keep pace with business changes

• Identifying gaps in cover across areas like cyber, interruption, and assets

• Seeking professional advice to ensure policies reflect real-world risks
  

The aim is simple: help businesses become more resilient to unexpected events. 

The Role of Expert Advice

One of the strongest messages behind the guidance is the importance of working with experienced advisors.

Insurance is not one-size-fits-all. Each business has a unique risk profile, and small gaps in cover - or misunderstandings in policy wording - can have major consequences at the point of claim.

At VistaNW, we see first-hand how underinsurance impacts businesses. Often, it’s not a lack of intent - it’s a lack of clarity.

That’s why we focus on:

• Tailored risk assessments aligned to your business

• Clear, transparent policies with no hidden surprises

• Ongoing reviews to keep your cover up to date

• Claims support when it matters most
  

Turning Insurance into a Strategic Asset

Too often, insurance is treated as a tick-box exercise or a cost to minimise. The ABI’s findings show why that approach no longer works.

Insurance should be viewed as a core part of your risk management strategy - protecting not just your assets, but your ability to continue trading after a major event.

Final Thoughts

The gap between perceived and actual insurance cover is one of the biggest risks facing SMEs today.

The question isn’t just whether you have insurance - it’s whether it would respond when you need it.