Last updated: 17 Jun 2024 12:00 Posted in:
Over a quarter UK SMEs would not for a survive for more than a month if critical equipment malfunctioned, according to research by HSB UK and Ireland,
The bank gathered responses from SMEs across multiple UK industries, and found there was gap in preparedness for sudden and unforeseen equipment breakdown.
In the event of the failure of business-critical equipment, almost two-thirds of respondents admitted that their business would not survive longer than three months, as this would severely halt their ability to trade. Less than half of those surveyed calculate that they could absorb the cost of essential equipment breakdowns, with 60% confessing they can only allocate around a third of their monthly revenue to cover unexpected expenses.
Despite equipment breakdowns leading to costly repairs and replacements and, in some cases, disruption of business operations, the survey respondents had contrasting views when it comes to insurance.
Only 19% of respondents would rely on insurance to finance the replacement of essential equipment in the event of a breakdown, while 12% would explore finance or leasing options.
In terms of the perception of insurance importance, while 15% of respondents deemed equipment breakdown insurance ‘extremely important’ and 29% considered it ‘very important’, 11% dismissed it as ‘not important at all’.
Alan Cain, breakdown and energy product leader at HSB, said: “As the value of high-tech, complex equipment continues to rise, so too does the cost to fix or replace it. It’s therefore concerning to see that some businesses may not survive a critical equipment breakdown which underlines the importance of proactive risk management strategies.”