SMEs warn no deal Brexit could hit business insurance

A no deal Brexit could create a surge in businesses with no insurance, as small and medium sized enterprises warn of cashflow problems, according to an online poll from Premium Credit, a UK finance company.

The company warned that an inability to pay for the compulsory insurance cover required could mean some businesses could be breaking the law.

In the poll, of 335 UK SMEs, 47 percent said Brexit will have a ‘very significant’ impact on their ability to successfully manage their cash flow and pay for business insurance.

A similar proportion, 45 percent, said they ‘very concerned’ about cash flow, while 34 percent said they were ‘fairly concerned’. Just one in five (21 percent) said they were not worried.

Adam Morghem, strategy and marketing director at Premium Credit,said: “We lend around £3 billion a year to help UK businesses spread the cost of their insurance. Our research reveals that 61 percent of SMEs claim to use credit cards, loans and premium finance to pay for their insurance, but this could increase dramatically if their cash flow is damaged as a result of a no deal Brexit.

“SMEs could see the goods they buy becoming more expensive, they may have to spend more on stockpiling, and the cost of storing this could also increase. All of this could make it harder to pay for the essentials needed to run their operations – from paying staff salaries, rent and insurance.”