By: Vera Nagtegaal, executive head of online comparison website Hippo.co.za
Insurance options available to business owners, to survive tough times
In the current economic climate, South African businesses continue to fight for survival. Looming credit downgrades, staggering economic growth and the possibility of more load shedding after Eskom’s announcement this month, have added to the already strained market – all of which could impact small to medium businesses the hardest.
According to Vera Nagtegaal, executive head of online comparison website Hippo.co.za, business owners must make sure that they are protected against any possible losses in this unpredictable climate.
“With many corporates having suffered major losses during previous periods of load shedding, it is best not to leave anything to chance. Assess your insurance and make sure all areas within your business are safeguarded.”
She advises that all businesses should find suitable, comprehensive business insurance cover, which should be tailored to their operations.
Business insurance usually covers a wide variety of risks, from vehicles and trailers to goods in transit, business all risks, business property and other liabilities.
Nagtegaal says that there are many innovative insurance solutions available.
“But before taking out the first cover that you are offered, do a needs analysis to identify what kind of cover your enterprise would require. Thereafter, find an insurer that has the best range of benefits and is willing to put together a package to meet those needs.”
For any business wishing to protect themselves against possible losses, the following types of insurance are good to consider:
- Commercial Property Insurance protects the commercial property of the policyholder from damage in the event of fire, theft or natural disaster. Depending on the provider, installed machinery and equipment for business operations could also be covered.
- Employers’ Liability Insurance covers business owners financially when they are liable to pay for damages to an employee after an accident that occurred during the business day.
- Professional Indemnity Insurance provides financial protection to businesses that provide a professional service to their clients. If a client suffers a significant financial loss as a result of a business’s alleged negligence, they may seek compensation.
- Product Liability Insurance covers a business financially from claims a customer may make should injury, illness or death occur due to use of a defective product.
- Key Person Insurance offers financial compensation to a business if a significant employee, usually the owner or CEO, is unable to work due to death, disability or illness. It pays out a lump sum to the business to minimise the financial loss the business might experience.
- Goods in Transit Cover protects items while they are transported by road to and/or from the specified business address.
- Electronic & specialised equipment cover insures all electronic items fulfilling an essential function in the business.
- As load shedding periods leave buildings vulnerable to fire damage, building insurance is essential.
- Money cover is needed to cover any bank and currency notes that would be at the risk at the business premises.
- Stock cover ensures that when products are damaged, as a result of water and fire damage, for example, compensation is received.
- Business Interruption cover protects any loss of income and covers your business’s fixed monthly expenses.
Nagtegaal insists that no business should leave themselves vulnerable to unforeseen disasters that could cripple their livelihood or completely sink them.
“It is up to the business owner to ensure survival, by doing the research, identifying weak points and making sure they have the right cover in place, to better protect themselves from unforeseen incidents, such as planned and unplanned load shedding,” Nagtegaal concludes.