Firms want bad debt protection
Report suggests businesses want insurance for late payers and unreliable suppliers
Nearly half of small companies now want their insurance policies to cover bad debts, new research has revealed.
The poll of small business owners also found that 16% want to insure against costs to sue suppliers that fail to deliver.
The study, by the Centre for Risk and Insurance Studies at Nottingham University, found that nearly 40% of small businesses are now looking for ways to improve cashflow, while nearly 20% want to lower operational costs and reduce company debt.
Christopher O’Brien, director at the university’s business school said: “The recession may have led to small businesses viewing risks differently, being particularly concerned about financial risks and looking for greater protection against issues that threaten their position in increasingly competitive markets.
“In addition, there may be circumstances beyond the business owner’s control that they are not insured against, but could cripple the business. So there are areas where insurers may wish to consider expanding the protection they provide to help businesses protect their cashflow and reduce damage caused by loss of revenue.”
An additional finding of the report was that over half of small business owners cite their main objective for the next five years is simply to survive the turbulent economic climate.
© Crimson Business Ltd. 2010