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In most cases, business insurance has the primary function of covering the costs of preventing or treating the many risks which businesses are open to on a daily basis. Be it accidental or purposeful vandal damage, incidents of varying degrees are normally covered and attended to by the insurer, helping to protect business people and their investments.

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Businesses attract more risks and dangers than originally meet the eye, day after day. Using a small groceries shop as a model, risks that could require insurance cover include: vandalism, robbery, plumbing issues, technical faults, electronic damage, impact, emergency service charges, natural disasters like earthquakes and floods, and more. It is the role of the insurance provider to cover the costs of damages caused by any of the above incidents.

Particularly when beginning on a business venture, it can be difficult to fund the establishment of the business itself, without the additional pressures of payments for incidents. However, having your business insured is not something which is free and it usually requires a monthly, yearly, or long-term fee.

You may be asked to organise a contract which runs for a specified amount of time and which usually can be renewed at the end of the payment. By paying a lump fee, your price will be kept the same over the whole period. However, if you choose to opt for monthly installments, you may find that financial difficulty could compromise your ability to pay for your cover every four weeks.

Although it is your own choice to have certain kinds of business insurance, it is also compulsory to have some installed within your company. For example, if you have employees and people working for you, employer’s liability is necessary to fulfil South African law. Without this cover, employees may sue you personally for any self-harm caused during the duration of their employment.

Another example cover option is professional indemnity, which will assist you in the case of complaints from clients of your service, which ordinarily relate to losses as a result of your company’s action or approach. In the case of being charged, it is dependent upon the specific policy you are committed to as to whether or not you can make a claim. Be sure to check the small print to ensure maximum safety with this.

As your business expands, there are more elements to consider, as more components become involved within your successes. Ranging from director’s cover to that of your employees, it is possible that having insurance could save you cash in case of an incident, dependent on the price of the established premium. The premium you pay can vary dependent upon the insurer you choose and other factors like business size and overall turnover.

If you are planning to open a business, ensure that you fulfil all of the necessary laws which relate to insurance and incident cover. After establishing these, consider whether or not it would be worthwhile to invest into other forms of insurance and ask yourself this: would additional insurance help your company make more profit in the long term and could it make your service safer and more productive?

Further Reading:

1. Saving on Public Liability Insurance

2. Insuring Money on your Business Premises

3. Product Liability Insurance


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