If the past two years has shown South African companies anything, it’s that no business can afford to be without insurance. Whether a large multinational, an SME or a one-person band running out of a garage, insurance is critical to protecting businesses against everyday risks in volatile times.
These risks include natural disasters, cyberattacks, contracts and even costly legal expenses on potential liability claims, said Jacques Pienaar, head of commercial underwriting at insurer King Price.
“The world has never been more uncertain and unpredictable. Insurance doesn’t just ensure continuation of the business and cover any financial losses, but also provides credibility to your business, showing your clients and employees that you are trustworthy and will be able to offer compensation if anything goes wrong,” said Pienaar.
However, it’s important to know what types of business insurance are available, and what each one covers. Some examples of insurance include:
- General business insurance covers vehicles, buildings, contents, electronic equipment, stock, plant, and machinery. Risks like accidental damage and theft can also be covered.
- Business interruption covers the financial loss a business may suffer due to an insured event. Items leaving the premises can be covered under Business all risks.
- Fidelity insurance covers dishonest and unlawful actions by employees, while machinery breakdown provides cover for unforeseen and sudden damage to machinery. Financial losses associated with breakdowns and cover for deterioration of stock can also be included.
- Public liability insurance covers damages that businesses are liable for arising from any accidental death, injury or loss which occurs in connection with their business, while employer’s liability covers damages they are liable for because of any accidental death, injury or loss sustained by their employees.
- An increasingly important insurance type is cybersure, which covers businesses against financial loss, disruption and reputational damage that result from cyberattacks. It covers all software and data, and protects businesses against liability arising from third-party attacks on their IT infrastructure.
- Engineering insurance covers contract works, works damage, and plant all risks, while advanced loss of profits covers the gross profit lost due to an insured incident.
The recent unrest and looting in the country has also highlighted the importance of having Sasria cover. Sasria is the only short-term insurer that provides cover against extraordinary risks such as civil commotion, public disorder, strike, riot and terrorism, which are not covered by ordinary insurers. Sasria cover can usually be bought through an insurer as part of a business insurance policy, but it can also be procured directly from Sasria.
“To claim from Sasria, there must be physical damage to the insured property first. It also doesn’t pay out for consequential or indirect loss or damage, other than the loss of rent, or losses caused by prevention of access – like deterioration of stock or perishables,” said Pienaar.
“What’s critical to note is that no two businesses have the same insurance needs. That’s why we recommend that a business talks to an accredited broker, who has the experience to assess their exact risks, and give them the right advice.”