Ryno de Kock, Head of Distribution at PSG Insure

For business owners, there are sometimes opportunities for growth, but the key is to ensure that any bold plans to scale or branch into new avenues include sufficient risk mitigation and protection. For many businesses, short-term insurance will play an integral role here. “It’s easy to get caught up in the urgency of finding new income streams or increasing capacity,” says Ryno de Kock, Head of Distribution at PSG Insure. “But if you’re taking on new stock or entering new markets, you need to ensure your cover still reflects your actual risk exposures.”

This is where working closely with a qualified short-term insurance adviser becomes essential. Commercial insurance is not a one-size-fits-all solution. Anything that could change your business risk exposure will affect your short-term cover.

Look at your liability and reputational risks

In addition to ensuring new assets and stock are adequately covered, businesses must also relook liability risks. Expanding into new sectors or customer segments could expose a business to different forms of third-party liability. “From covering defective product claims to cyber threats or reputational risks – getting specialist advice can help tailor your policy accordingly,” says de Kock.

Importance of updating insurance to fit your business

The risk of underinsurance – or failing to disclose any material business changes to an insurer – can lead to significant financial losses in the event of a claim. “If your business has grown in complexity but your insurance hasn’t kept pace, a claim may be partially settled or even rejected. This can cause major financial challenges.”

Short-term insurance isn’t just about protecting what the business has, he adds. “It also plays a key role in enabling business continuity and supporting long-term growth. No business can afford to halt operations due to an unforeseen event like fire, theft or flood. That’s why business interruption cover is such a critical, yet often overlooked, component of a commercial policy. The risks involved will also shift if your business focus has shifted.”

With a multitude of macro and microeconomic challenges, many companies may be tempted to reduce their cover to save on premiums. However, this short-term saving can come at a long-term cost. “Insurance needs to be viewed as a business enabler, not a grudge purchase,” says de Kock. “Insurance needs to be a consideration throughout the journey of pivoting in your business or starting something new, evolving as the business grows.”

Ultimately, sustainable business growth requires solid planning. “So, when a growth opportunity comes along, but don’t forget to run it by your adviser to make sure your business is still properly covered,” de Kock concludes. “Scaling or reshaping a business is a major milestone, but with every bold step forward, you need to widen your safety net too.”