By Daniel Hunter

Small to medium-sized enterprises (SMEs) are more like to insure easily replaceable assets such as printers and mobile phones than they are their people, according to new research.

The research, commissioned by income protection specialist Unum, reveals that nearly half (46%) of small and medium-sized companies have insurance for easily replaceable assets, such as mobile phones. This is despite only a tenth (10%) admitting they would be extremely concerned if these were to break.

Conversely, despite 94% of SME businesses recognising that employees are one of their company’s most important assets, over a third (37%) believe that they only offer adequate employee benefits packages or that they could do more to protect their staff. A further 23% — almost one in five — admit to not offering any form of benefits package to their staff, highlighting a mismatch in what companies value versus what they protect.

Sickness absence costs the average micro-businesses £ 3,500 a year, rising to £ 40,500 a year for companies with 100 to 250 employees, and 87% of businesses admit that long term sickness absence is a concern for them. However, just 14% of SMEs protect against long-term sickness by offering Income Protection as part of their employee benefits package.

The research, which polled 345 senior business people from small and medium-sized companies, found that:

· Almost half of SMEs have buildings insurance (48%) and contents insurance (46%)

· Almost a third (32%) of SMEs have comprehensive insurance for their company cars

· Just 14% of SMEs provide Income Protection for their staff

· Almost a quarter of SMEs (23%) don’t offer any form of employee benefits to their staff

SMEs are often disproportionately exposed to the risks posed by staff absence. 57% of SMES do not have any form of financial protection to safeguard the business against the risks associated with losing the owner, despite the fact that 42% of SME workers agreed their business would ultimately cease trading if the owner was forced to leave work.

Linda Smith, HR Director at Unum, said: “Whilst SMEs do understand the importance of employees to their business, there is clearly a mismatch between what they value and what they spend their money on protecting.

“Around one in ten employees will go on long-term sick leave during their working lives, so it is concerning to see so many SMEs without a plan in place to protect against this eventuality. SMEs are often particularly exposed to the risks and cost volatility of absence.

An up to date employee benefits package that includes long-term financial protection can help mitigate those risks. They can also prove a real differentiator when it comes to recruiting and retaining staff, so we are calling on companies to do more to protect their most important asset.”

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