Data from Premium Credit shows that 55% of SMEs are using credit to pay for their insurance cover. This is up from 51% the previous year. The research showed that 27% of firms had reduced their level of cover in the past year, slightly up on the 25% found to be cutting cover the previous year.

18 per cent of SMEs say their firm’s level of underinsurance has increased in the past 12 months and 12% said they had missed out on claims in the past five years due to underinsurance. This compared with 14% in the previous index and 12% in the 2022 index.

Adam Morghem (pictured), strategy, marketing and communications director at Premium Credit, said: “Credit is essential to ensuring that SMEs have the correct types and level of insurance they need across their operations and that is highlighted by the growth in the number of firms using credit to do so.

“Underinsurance is however a growing issue for SMEs with firms increasingly cutting back on cover and in some cases cancelling policies entirely.”