The self-employed and small and medium-sized enterprises (SMEs) are the largest representatives of the Spanish business fabric. That is to say, their presence is much more numerous than that of the large companies, although the latter may come to dominate the offers in the labor market. But, to maintain their status as the heart of the national economy, SMEs need to guarantee certain protections in their day-to-day activities. Not surprisingly, his routine is necessarily based on the assumption of certain risks.
Because when things don’t go or don’t go well, not only the smooth running of the business is affected. Any person or supplier that is related to the company can also be a victim of errors or setbacks derived from the activity. For and for this there is insurance for SMEs, policies that are not mandatory, but necessary for these companies to survive the problems.
In this sense, entrepreneurs and freelancers must take into account the mandatory insurance established by law to guarantee market stability. For example, if the company has its own fleet of vehicles, all of them must have a policy for their legal circulation; or civil liability coverage for some professional activities such as medicine, architecture, law… But they should also consider the possibility of taking out insurance that covers a series of basic guarantees in their business activity.
We are talking about insurance for small and medium-sized companies that is not mandatory but is recommended. Thanks to them, the entrepreneur or freelancer will be able to dedicate themselves to what really matters – growing their business – while the insurance company takes care of all the fringes related to the safety of their activity.
Insurance for SMEs: the five basic coverages
No company, regardless of its size, is free from human error (conscious or unconscious), eventual accidents (leaks, cyber attacks) or natural incidents (floods, power failures due to storms, etc.). Nor that these setbacks unbalance the progress of the activity and endanger its continuity as a company. For this reason, there is insurance for specialized SMEs that cover a series of basic needs and allow, at least, not to lose control of the company.
Depending on the type of business or the needs of the company, these are the coverages for SMEs that are not mandatory but are recommended:
- Office material damages With the same bases as those of home insurance, this coverage arises especially applied to businesses. In this case, the policy covers damage caused at the SME’s headquarters such as glass breakage, water damage, cosmetic damage, etc. It also includes expenses derived from damages to third parties (for example, destruction of documents or personal injury) and, on some occasions, other additional coverage such as loss of profits or breakdown of machinery or electronic equipment. Depending on the type of company, some or other conditions will be necessary.
- General Civil Liability The law establishes that any entity is obliged to repair material or physical damage and harm caused to a third party, whether employee of the company or external to it, during the exercise of an economic activity. Having Civil Liability (RC) insurance provides peace of mind and the necessary coverage against the economic expenses that may arise from any accident.
- Professional Civil Liability Some activities, due to the nature of their trade, require specific civil liability coverage. They are not mandatory by law, but such is the magnitude of the consequences if something goes wrong that more and more customers are hiring this type of policy. At Hiscox, aware of this reality and with the aim of adapting to the needs of each of the companies, more than 150 professions receive protection against damages caused to third parties by the development of their activity.
- Managers and Directors (D&O) These two figures from the upper echelons of small and medium-sized companies are the target of more and more complaints and lawsuits. No matter the sector of activity or the origin of the request, these positions need certain guarantees and protections to continue playing their role in decision-making in the company. At this point, we remind you that negligence and an estimated lawsuit can force these directors to respond with their personal assets.
- Cyber risks In the 21st century, very few businesses remain offline. Everyone uses the network for different purposes, and everyone is at risk of being attacked by a hacker or a technological accident. These claims, which can paralyze activity almost permanently, can be covered by specialized cyber risk insurance.
