All businesses are open to risk if they don’t have the correct level of insurance, and some, more than others, may be at risk of financial hardship as a result of being either underinsured or uninsured.

Although the UK is not currently in recession, continued economic uncertainty and low productivity means growth is expected to slow and we’re seeing evidence of businesses dropping aspects of cover.

Although not all insurance is a legal requirement, businesses need to ensure that they’re adequately covered against many of the risks they could be exposed too, so they aren’t left in a vulnerable position.

Without the correct level of business insurance, a business will have to pay for any compensation claims itself to cover the cost of replacement, such as tools and equipment, stock, repair of premises etc. These unforeseen costs could be catastrophic, especially for smaller business.

It’s also the case that some trading authorities and other organisations might require a company to have a certain level of insurance for a particular area in order to work with them, and so not having insurance in place could mean that the company fails to secure new business opportunities.

Regardless of the type of business, all businesses should review their insurance annually, or at any time there is a significant change to their business, including their financial lines cover, to ensure they’re not at risk.

Brokers play a key role in not only helping their customers understand what their sums insured and indemnity periods should be, but also in explaining the wider benefits insurance can offer, beyond just financial protection. This might include expert advice or securing alternative premises, depending on the policy. Ensuring there is a regular conversation between businesses, brokers and insurers, will help identify any changes in cover requirements.