Business Insurance: Grudge purchase or mandatory cost?

In 2016, South Africa experienced deteriorating GDP growth caused by various factors including the Rand’s depreciation of R15.51 against the Dollar, severe drought, water shortages, and the rising unemployment rate. GDP growth is however expected to improve moderately in 2017. Businesses, particularly start-ups and SMEs, can expect better growth and opportunity than in 2016.

“Now more than ever small businesses need to safeguard themselves against the perils that could be harmful to their growing business,” says Derek Wilson, Head of online insurance and financial services comparison website, Hippo.co.za.

Business Insurance is more than just protecting your business assets. Not having insurance could result in a negative impact to your bottom line, damage to your business’s reputation or even the loss of your business. Here’s what you need to know about Business Insurance:

Insure your nett worth
If you have business property such as commercial offices, a house or any vehicles used for business or commercial purposes, you have nett worth. Ensure that your nett worth is adequately covered and that you do not put your business under unnecessary strain by having to pay for loss or damage to business assets yourself. Insurance for business assets usually includes cover for theft, accidental damage, fire, vandalism and, most importantly, cover for business interruption or loss of earnings if you are unable to operate following a claimable event.

Your risk profile
Understand how your business risk profile is calculated by the insurer as things such as your credit rating, type of business, area where you do business from, and where your business or commercial assets are kept, are taken into account.

You are liable
Liability cover is probably the most important cover you need. The loss or damage to another’s property or worse, injury or loss of life to a person, could not only cost you money, but also have devastating effects on your business’s reputation and credibility. The reputational damage could result in further communication and marketing costs to repair the damage to your business’s image and could determine whether your business survives the impact or not.

“Various insurers are able to provide you with Business Insurance according to your specific needs”, concludes Wilson, “Business owners can research costs and benefits from a range of different insurers at Hippo.co.za”.