Why SMEs in Singapore Need Insurance for Sustainable Growth

Small and medium enterprises (SMEs) are essential contributors to the economic development of the world. They account for over 95 percent of businesses in ASEAN countries according to the ASEAN AME Policy Index. With the business landscape around the world rapidly changing, SMEs are unprotected and at greater risk.

Health and safety regulations in the workplace are becoming more stringent. Business people have to travel more with increasing globalization. Businesses are prone to cyberattacks, which have become common now. 

A study conducted in 2017 by Microsoft revealed that 53 percent of organizations in Singapore experienced a cyberattack or don’t know whether they had a security issue. Nevertheless, organizations in Singapore suffered economic losses to the tune of 17.7 billion USD due to cybersecurity threats. Notwithstanding these increased risks, most SMEs in Singapore lack adequate insurance coverage. The need for insurance for SME is increasing, for it protects them from any fortuitous events and helps them grow in the future.

Various types of business insurance solutions for SMEs 

Business insurance is for protecting your business, employees, and yourself. With no proper insurance, you will lose your peace of mind, as well as focus on improving performance, productivity, and profitability. Here are some common business insurance solutions for your SME. 

  • Life Insurance 

With life insurance, you can protect your business from the loss of key management personnel or guarantors. Based on your business needs, you can choose any of the life insurance solutions like:

  • Whole-life Insurance
  • Level-term Life Insurance
  • Reducing Term Life Insurance, and 
  • Endowment Plans

With the right insurance solution, you can cover the financial risk of a sudden and unforeseen loss or disablement of a key person and decision-maker in your business. You can also find Term Life Insurance for additional protection for a certain number of years, which offers payouts. Being a non-participating insurance product, Term Life Insurance offers coverage against the sudden and unpredicted loss of a key person due to death or terminal illness.

  • Universal Life Insurance 

If you are looking for a flexible insurance plan to protect your SME business from any unforeseen events, choose the Universal Life plan. It offers various benefits like key person protection, risk management, talent retention, and buy-sell planning with Key Man Insurance, Executive Bonus, Asset Diversification, and Credit Protection respectively.

  • General Insurance 

Under general insurance, you can find a variety of customized insurance solutions for SMEs. Here are some prominent ones:

  1. Commercial General Insurance 

You can purchase this general insurance plan to safeguard your business operations, assets, and employees. Under the asset protection insurance solutions, you can find several tailor-made plans suitable to your business needs. They include:

  • All risks insurance
  • Fire insurance
  • Burglary insurance
  • Money insurance
  • Machinery all-risk insurance
  • Marine cargo insurance

Similarly, you can protect your business operations through one or more of these solutions:

  • Business loan protection
  • Business interruption insurance
  • Fidelity guarantee insurance
  • Contractors’ all-risk insurance
  • Public liability insurance

Also, you can take care of your employees with insurance solutions like:

  • Healthcare insurance
  • Group Personal insurance
  • Travel insurance
  • Directors’ and officers’ insurance
  • Work injury compensation
  • Casualty Insurance

You can find a diverse range of casualty products under this type of general insurance. They include General or Public Operations Liability, Global Liability, Completed Operations Liability, Excess Liability, Construction Liability, and Workers’ Compensation or Employers’ Liability. The coverage for these liabilities is based on the occurrence or claims made.

  • Cyber Insurance

Cyber Enterprise Risk-Management insurance is designed to cover financial loss and recovery costs arising from network security breaches or failure, programming errors, or human errors. You can have cyber insurance customized to your particular business needs. 

  • Property Insurance 

Your SME is exposed to risks and hazards and you don’t know when they will occur. Protecting your business with the right all-risk property insurance solution is crucial. It includes coverage of fire accidents and terrorism. 

  • Work Injury Compensation

With this insurance plan, you can protect your employees and yourself from a workplace injury. This general insurance solution comes with several benefits like replacement staff or recruitment costs, traditional Chinese medicine, continuous worldwide bed confinement, terrorism benefit for injury, witness and incapacity, and accidental HIV infection.

  • Financial Lines 

You can have coverage against potential liabilities with a range of risk-management insurance solutions. They include Directors and Officers Liability Insurance, Commercial Crime Insurance, Professional Indemnity Insurance, Medical Malpractice Insurance, Public Offering of Securities Insurance, and Cyber Insurance.

To conclude, SMEs in Singapore face challenges of employee injury, property damage, and cybersecurity threats. With appropriate insurance for SMEs, you can protect your business from unexpected risks and damages, which can hamper its growth.