Aviva has introduced a new initiative aimed at addressing underinsurance in business interruption (BI) cover for UK small and medium-sized enterprises (SMEs).
The insurer will now automatically provide a minimum 24-month BI indemnity period, free of charge, for all new business quotes and renewal terms issued through its FastTrade platform. This enhancement applies to commercial combined, office & surgery, and property owners policies, with the declared sum insured proportionately increased to match the extended cover.
This initiative follows research from Aviva that highlights a gap between SME expectations and the realities of recovering from major incidents. While 91% of SMEs express confidence in their ability to overcome a significant event, 86% believe recovery would take less than a year, and 57% expect to recover within six months. Only 13% of businesses anticipate a recovery period between 12 and 24 months.
Actual insurance cover among SMEs reflects these expectations, with 28% of businesses holding BI cover for 12 months and 21% for 24 months. For those without sufficient cover, 25% would adapt operations, 17% would use cash reserves, and 14% would take out a loan. Notably, 12% of SMEs fear they might not recover at all if faced with a major disruption.
Aviva’s 2024 claims data indicates that recovery often takes longer than anticipated. Only 13% of businesses affected by flood or fire reopened in less than six months, while 57% required a full year and 43% took between 12 and 24 months to recover. This discrepancy between expectation and reality leaves many SMEs at risk of being underprepared for serious claims.
Business interruption and cyber risk are among the top concerns for organisations, according to Aon’s 2025 Global Risk Management Survey. The survey found that only 14% of organisations track their exposure to these risks, which contributes to widespread underinsurance.
Previous research from Aviva also showed that nearly three quarters (73%) of UK SMEs anticipate growth over the next year, with many planning to diversify, hire more staff, or open new locations.
Despite this optimism, only 32% of SMEs turn to brokers for risk management support, and just 25% seek help with business continuity planning. As businesses expand, insurance needs may become more complex, underscoring the importance of adequate cover and professional advice.
Rebecca Gambrell (pictured above), managing director, SME and delegated authorities at Aviva, said, “Our industry has long recognised that a significant proportion of our SME customers are underinsured, yet little has changed to truly address this issue.”
Gambrell said that the extension of cover to 24 months and the increase in the sum insured are intended to give SMEs the certainty and support required to focus on growth, knowing they are protected against unexpected events.
“This is about more than just insurance. It’s about delivering better customer outcomes, strengthening business resilience, and standing by our customers when they need us most,” she said.
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