Do you take business insurance seriously? It is easy to overlook insurance until there is a problem.
You must get your business insurance right and also review it often.
I was listening to some discussions this past week as people commemorate the unfortunate terrorist attack at Westgate Shopping Mall last year and I realised just how painful it was for so many people.
Although several people had covers, many of the insurance companies backed out, claiming that the policy did not include terrorism.
This includes medical covers when patients could not have claims settled. We are living in times where there are more risks around us and our businesses.
As an SME owner, you need to be proactive to ensure that you can transfer many of the possible risks in the business environment and real world.
As a rule of the thumb, take insurance seriously, plan for it, and make sure that your cover is right. Here are some prerequisites to guide you:
All businesses require insurance
Insurance is also dependent on your business. Do not under-insure and review your insurance on a regular basis.
Do not take your agent’s or broker’s word for it, request your policy document and be sure that you know what it contains.
Insure your business premises if own that property
Above this, insure business fixtures and fittings from machinery, computers, and desk.
Ensure that you arrange for fire, theft, or damage.
Insure your vehicles conprehensively
If you use your private vehicle for business, I recommend taking a comprehensive insurance cover for the vehicle too.
Remember to get a copy of the driving licenses for all those who may be driving your business vehicles. Keep this documentation well.
Insure your resale stock
That is stock you hold in your business ready to sell to your customers. The cover should include fire, theft, and damage.
Do not forget to insure stock in transit if your deliver to customers. Stock that has been bought but not delivered still belongs to your business and in case of fire, damage, or theft during transit, the loss could go to your business.
Insure the money in your business premises
Be sure to meet the requirements of how money is stored or transported.
Many SME owners forget to insure themselves, yet they are one of the most critical assets of the business.
Be sure to take a personal accident cover that insures you against being unable to work in your business because of injury or illness.
Another critical cover is a business interruption insurance. We all know that when business is interrupted by, say, fire or an attack, it can take a lot of time to get back on our feet.
Insure for the equivalent of what your gross profit is. If you take a cover for business interruption, it means you will be able to pay for important business costs, including rent, staff, loans, utilities, and other costs in case of a disruption.
Another form of cover that is proving critical is the Work Injury Benefit Act (WIBA) insurance.
This is a legal requirement for employers and can save you from serious trouble when your employees suffer injury while working in your business.
In this day and age when litigation can catch you flatfooted, be sure to consider this cover.
If you are in professional services, consider a professional indemnity cover. Insurance can be tricky, especially as your business grows and becomes more complicated.
Use a good broker or agent who specialises in your trade, but who also understands your business. This way, you not only get the right business insurance, you also get good advice.