S'pore SMEs face risks as many opt for minimum insurance coverage

Insurers say major disruptions can pose threat to survival of smaller firms

- Chor Khieng Yuit

Smaller companies in Singapore are subject to the same risks as any other businesses and, due to their size, having adequate coverage against major shocks could mean the difference between survival and oblivion.

Most small and medium-sized enterprises (SMEs) here, though, buy insurance that is mandated by regulatory or contractual obligations and nothing more, noted Mr Goh Shun Quan, head of underwriting for retail and SME at insurer QBE Singapore.

For example, an SME will buy work injury compensation insurance to cover employee injury or public liability insurance for third-party injuries or property damage, if it is required by its landlord.

He added that other types of insurance that an SME may need but are not compulsory include business interruption insurance; property insurance for its building, machinery and inventory; employee benefits coverage for medical, personal accident and corporate travel expenses; and trade-specific insurance such as for marine cargo, professional liability and cyber attacks.

Ms Jenny Lim, chief executive of insurance broker Howden Singapore, said SMEs tend to overlook an employee benefits insurance programme, which, if implemented, can help the SMEs to attract and retain talent.

Business contingency events such as a fire which breaks out and shuts down the factory for an extended period of time or the temporary closure of the business because of hygiene lapses can potentially cost a lot of money.