Small and medium enterprises (SME’s) play an integral role in job creation in South Africa, but their size and the untold challenges associated with being an SME makes them vulnerable to unplanned issues that include crime, fire and floods as well as fraud.
The costs that go hand-in-glove with these eventualities are compounded by failure to protect the business sufficiently through appropriate business insurance cover.
The greatest losses are experienced when a business is not insured; under-insuring your business, property or assets can also have a dire effect on your financial well-being.
- Identifying all potential risks to your business is important – these could include crime-related perils such as burglary, armed robberies and theft of vehicles.
- Other issues to take into consideration include natural perils such as storm damage, hail damage, lightning damage and flooding.
- Legal liabilities such as products being sold and repaired, motor accidents where the insured or driver is negligent and more.
It is important to evaluate all risks in terms of their likelihood and the potential size of the losses. Financing residual risks and assessing what should be insured, and which is all depending on the information gathered as well as the industry you operate in.
Commonly overlooked areas usually include underestimating the impact that damage to equipment, stock and buildings has on financial well being.
Also forgetting to consider the legal liabilities of the business could impact negatively on your business.
- Always declare all information to your service provider, no matter how insignificant the details.
- It is imperative to identify all exposures to your business.
- Act as if you are not insured – avoid claims for those smaller and regular costs and instead use insurance for major catastrophes.