Insurance equals peace of mind

Why every SME needs insurance cover

Having insurance gives you peace of mind because you know that your business is secure. There are many unforeseen problems that can happen to your business, such as accidental damage, machinery breakdown, fire, or theft. These incidents can happen when you least expect it and knowing you have insurance cover puts you at ease because you know that your insurance will take care of the situation. You can’t predict what will happen now or in the future, so when you’re insured you can at least know that you will be covered and you can focus on your work and grow your business. Let’s take a look at the most important cover you should consider for your business and as the business owner.

Business liability insurance

Under South African law, retailers, suppliers, manufacturers and distributors can be held liable for damages caused by defective or hazardous products. Whatever the nature of your business, you are responsible for the products and services you offer as well as what happens in your workplace. The liability of business also extends to workrelated illness or injury even if the employer had no intention to cause harm. When working out how much liability cover you need, consider the type of business you have and the level of risk your products, services and premises pose to your employees and customers.

Property insurance

If you own your building – as is the case with shebeen owners who operate from their homes – or just the equipment you need to conduct your business on a daily basis, your policy should protect against fire, floods, theft and vandalism, to name a few. The building and all of its contents should be insured for its full replacement value so you do not fall short should tragedy strike.

Business vehicle cover

It is vital to keep the goods you are transporting protected as well as the vehicle carrying them. You should insure your business vehicles against damage, theft, hijackings and collisions, given the alarming accident rate on South Africa’s roads – and it is wise to insure your vehicles at market replacement value. Goods in transit cover can be linked to your collection and delivery vehicles and will keep your loads covered in the event of any accidents or theft on the road.

For the business owner:

Credit life insurance

Imraan Ismail from Abacus Life Limited explains that credit life insurance is an insurance product specifically designed to cover the cost of your debt if you aren’t able to pay it back due to unemployment or loss of income, disability or death. He also confirms that “credit life insurance gives you peace of mind in the event that tragedy strikes, and you don’t want to burden your loved ones with repayment commitments that you are unable to meet”. You may already have credit life insurance and not even know it. That is why it is so important to read any credit agreements carefully before signing them. These will include all store cards, credit card agreements and vehicle finance agreements. According to the National Credit Act (NCA), credit providers can insist that you have credit life insurance for any credit agreement you have with them.

Funeral cover

According to Yandisa Ngcwabe from Abacus Life Limited, “The one thing that is certain in life is death and that is why funeral cover is one of the most important types of cover to consider. Funeral cover works by paying a monthly amount towards a funeral plan so that in the event of death, a specified amount will be paid out to your beneficiary.” The costs of a funeral will be covered so that your loved ones won’t have to worry about extra expenses. When deciding which funeral cover is best for you, the exact amount covered will depend on your unique situation. Everyone’s needs will differ when choosing a funeral policy. When considering the amount you need, ask yourself: • How much can I afford to pay every month • What do I need covered? • Who do I need cover for? Myself, my immediate family, my parents or my extended family?

Life insurance

A life insurance policy ensures that you can still provide for your family even when you have passed on. In exchange for monthly premium payments, an insurance company provides a lump-sum payment, known as a death benefit, to the beneficiaries upon the insured person’s death. If you are the breadwinner in your family, your death could leave your family financially vulnerable. Life insurance will provide your family with the security and protection they need should the worst happen. Insurance cover not only benefits yourself, but your family, your employees, their families and your clients too. With adequate coverage, they will also reap the benefits of an insured business. When seeking cover, never assume that the cheapest premium offered is the best option. Everyone’s situation is unique so always compare the cover, exclusions, excess and all terms and conditions before deciding on an insurance provider.