Many small business owners put all their assets and their lives into their businesses. Unfortunately, many remain unaware that unforeseen events could stop their business in its tracks, says Standard Bank.
Johan van Greuning, Head: Corporate and Business Insurance, Standard Insurance Limited, says: “Insurance is necessary for all businesses. When you own a small retail business and it has absorbed all you have, insurance is vital.”
Things to think about
Several key aspects should be considered when deciding on short-term insurance cover.
“The most important thing on the list is making sure that you are adequately insured. Your insurance should cover all your stock, fittings and also take care of costs that may be incurred through customers suffering injury on your premises,” says Van Greuning.
Stock: Insurance should cover additional costs that could be incurred if you are forced, for instance, to fly in stock to replenish shelves rather than wait for a normal delivery.
“If your shop is in a shopping centre, make sure you know exactly what is covered by the landlord’s insurance,” says Van Greuning.
Display windows: Ask whether these form part of the centre’s insurance, or if you are liable if it should break.
Fittings: If fittings such as geysers come with the shop, it is essential to know what could happen if this leaks or bursts. The same would apply to electrical fittings that are part of the store.
Generally, if these are covered by the landlord, you will still have to claim from your insurance for damaged stock.
Day to day costs: It is also important to make sure that insurance is in place to cover day-to-day costs and loss of profits that may occur.
Loss of profits: If a centre is badly damaged by fire for instance, you may be required to close your shop while construction and repairs take place. Unless you are properly insured, this could lead to the closure of your business.
Business interruption coverage: This will allow you to continue to pay wages and loss of profits can also be covered for pre-determined periods.
“In the event of having to move to a new shop, or to new premises altogether, because of an accident at a centre, these costs can also be effectively covered,” says Van Greuning.
Public liability insurance: Typically, most people suffer injuries due to ‘slip and fall’ accidents. However, if you own a restaurant or supply food to the public, it is also worthwhile to ask a broker what coverage you should have should people become sick due to contamination of foodstuffs or other causes.
Do you need a broker?
The question most asked by small business owners is whether an insurance broker should be involved in arranging business insurance.
“This depends entirely on what suits you,” says Van Greuning. “Many people running traditional businesses are happy to arrange insurance by phone. If your business is different to others, and if you are concerned about being under or over-insured, the best thing to do is to contact a broker.”
A broker will arrange for an assessor to visit your premises, inspect fittings and also discuss all insurance needs.
Insurance can then be arranged by the broker who will also act as an intermediary with the insurance company should a claim become necessary.
“Whatever choice you make, the most important thing is that you reevaluate your position and update policy values once a year.
“This will help ensure that you are never placed in the unenviable position of losing your business or finding yourself suffering from financial hardships because of an accident at your place of business.”