SME Package Insurance

SME Insurance

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What is SME Package Insurance?

SME Insurance, or Small Medium Enterprise Insurance, is a commercial policy that protects small-medium enterprises from common risks that may impact an organisation's functioning. With their business size and capital requirements being small compared to large-scale enterprises, SMEs are vulnerable to uncertain economic risks and operational disruptions that require SME-tailored insurance. This scheme involves Property Insurance, Liability Insurance, Insurance for Goods in Transit, Employee Dishonesty, and Personal Accident Insurance.

Companies operating in Free Zones in the UAE necessarily require SME package insurance not just to comply with local laws and renewal of trade licenses but to have adequate financial protection as well. The primary objective of this insurance cover is to protect the business's assets and safeguard them from unforeseen risks. It can be beneficial in providing a sense of assurance to the owners for running their businesses without worrying about unforeseen risks. 

SME Business Insurance policies and their specifications are different as per different enterprises, as the policy packages are meant to cater to industry-specific segments like Education, Retail, and Healthcare related insurance coverage. The key benefit of such plans is that they are uniquely designed and cover all the trading and operational requirements of the entities. 

Who needs SME Package Insurance?

SME Package Insurance is designed for small and medium enterprises vulnerable to common risks that may negatively impact their working. However, such organisations are required to fulfill certain eligibility criteria to qualify as an SME, with the criteria being based on turnover, employee count, and so forth. 

Such organisations across all industries must have SME package insurance. The list of industries is as follows - 

  • Education
  • Healthcare
  • Retail
  • Clinics 
  • Food and beverages
  • Financial services
  • Chemical industry
  • Agriculture
  • Real Estate and More

Why get SME Package Insurance?

Whether your SME is a newly budding start-up or an established company, any physical or financial risk to your firm can prove to be a huge financial setback. The slightest uncertainty can lead to significant business crises that can make it difficult for the business to stand back on its own feet. This is where SME Insurance comes into the picture to provide you an additional layer of security against any business crises. 

The SME Insurance packages are designed by assessing the entire structure of the business and possible risk scenarios. All the policies under this scheme protect the interest of everybody serving an entity. 

Here are the top reasons your business needs SME Insurance coverage:

  • Protection against cash flow crises

Due to low cash flows and capital sources compared to large entities, SMEs are generally more prone to financial risk. A minor financial crisis here could interrupt the business's operations and even affect the salaries of its employees, not to mention the impact on the growth prospects in the long run. All this makes financial risk protection essential for any SME operating to protect itself amidst uncertainties. 

  • Protection against third-party risks

SME Business Insurance protects SMEs against uncertain events like fire, riots, theft, explosion, calamities, and so on. While such events are not in the entity’s control, it has to be prepared for any such scenario that endangers its financials. These plans provide compensation for the loss and downfall that a business may experience with such uncalled risks. 

  • Protection against legal liabilities 

An SME may require additional help if it is involved in a legal battle that can be costly. Arranging money while being engaged in a difficult situation can be a big challenge for a small firm. Having sufficient protection against legal liabilities is necessary to build a strong foundation for the business in the long run. SME Insurance ensures reduced liability costs and helps the organisation secure its rights.

Common risk scenarios faced by SMEs 

The common risk scenarios encountered by SMEs are as follows:

  • Employee dishonesty, where protection is given against the fraud committed by employees
  • Personal Accident of the owner or the employees resulting in death or permanent disability 
  • Cash flow crises that interrupt the daily business activities
  • Loss in production due to uncertain electronic equipment breakdown

Major Inclusions of SME Package Insurance

The following are the major inclusions under SME Package Insurance:

  • Fire due to fermentation, combustion, or natural heating
  • Explosion or Implosion
  • Earthquakes, volcanic eruptions, and other such natural risk factors 
  • Lightning 
  • Storms, cyclones, hurricanes, tsunamis, floods, tornadoes, and more
  • Landslide or rockslide
  • Bush fire or forest fire near office building 
  • Riot, strikes, or any malicious damages
  • Act of terrorism
  • Bursting of water tanks, pipes, etc.
  • Fraudulent misconduct by employees or employee dishonesty
  • Theft (within seven days of the occurrence)
  • Third-party public liability claims
  • Loss of revenue (Business interruption)
  • Transit insurance
  • Personal accident

Major Exclusions of SME Insurance

The following are the major exclusions of SME Business Insurance: 

  • Any wear and tear in business equipment, like dents, scratches, and so on
  • Any loss occurred due to day-to-day operations like holes in the water pipe, minor leakages, etc.
  • Any costs incurred by the business in improving its premises after suffering a loss. Such events are regarded as "betterment" costs and are omitted.
  • Loss of belongings due to "walk-in" thefts and robbery
  • Any loss in the value of an asset due to depreciation or wear and tear
  • Any loss or decline in trade opportunities is not covered. 

List of SME Insurance Providers in UAE

SME Insurance Provider

AIG Salama

Tokio Marine

Arabia Insurance
Al watheba Watania

Factors determining the prices of SME Package Insurance

While choosing the perfect plan for SME Insurance, an SME owner may consider many factors - right from the enterprise's size to the number of employees. These factors, along with the type of risk possible in their specific type of business and the industry,  affect the SME Insurance packages pricings.

At Policybazaar UAE, we take pride in our world-class risk assessment capabilities and plans which enable us to craft cost-effective risk management strategies through insurance that fulfil your specific requirements. We are here to provide you with the peace of mind which is crucial to safeguard your business and achieve your future objectives.

Frequently Asked Questions

Q1 - What is SME Package Insurance? 

Ans: SME package or SME insurance is mainly designed to insure small and medium enterprises from common risks. This type of insurance generally includes property insurance that offers coverage for buildings, stock, contents, and materials in the event of loss, theft, or damage, liability insurance for compensation related to workers, public liabilities, and more.

Q2 - Is this type of insurance for me? 

Ans: SME package insurance cover is for you if you are running a start-up or an established business. With this insurance, businesses and enterprises of different types and sizes can be covered against physical or financial losses, employees’ and customers’ liability, and more. 

Q3 - What are the benefits of having an SME package? 

Ans: Here are a few benefits of SME package insurance - 

  • Coverage for essential goods/contents (computer systems, storage systems, and more) which are necessary to run your business and support your customers against fire, theft, or water damage 
  • Financial assistance in getting your business back on track in case of any losses as a result of an insured scenario
  • Employers’ liability - covering employees in case of any injury, mishap, or death while performing duties associated with their work 
  • Coverage against legal liabilities related to customers and third-parties

Q4 - What is the eligibility requirement for getting SME Package Insurance in Dubai?

Ans: Here are the general criteria that one must fulfil to apply for SME Package Insurance - 

  • The organisation or business must possess an authorised trade licence.
  • The age of the official signatories should be at least 21 years.
  • The applicant should hold an AED Business Account.

Q5 - Can you transfer the existing SME package to another account?

Ans: SME package is linked to an account specified in the customer’s application form, and its benefits cannot be availed via another account. Additionally, the SME package cannot be transferred to another account and has to be purchased separately instead.

Q6. What is the procedure for cancellation of an SME package?

Ans: To cancel your SME package insurance plan, you can simply connect with your provider and initiate a cancellation request. For this, you can visit your nearest branch of the provider or contact them via call or their online platforms. 

Q7. Is there any coverage offered for employee death?

Ans: Yes, SME package insurance includes workmen's compensation, which offers coverage for physical injuries, occupational sickness, and death of employees while carrying out duties related to their work. 

Q8 - When can I cancel my SME insurance? 

Ans: As a policyholder, you can apply for SME insurance cancellation at any time. However, it is only possible as long as you don’t have any claim settlement during the insurance period. 

Q9 - What is the renewal process of the SME insurance policy?

Ans: Similar to other insurance policies, SME insurance plans are generally valid for a tenure of 1 year after which they have to be renewed. You can connect with your insurance provider before the policy’s expiry, initiate the renewal process, and follow the prompted steps.