Is Your Business Insurance Plan Ready for the New Year?

Do you have business insurance? Business interruptions can occur unexpectedly. Look at what happened to many small businesses during COVID-19! Who would have thought hundreds of small businesses could shut down in such a short time? Probably few. The same thing can happen in some areas of the country due to economic disruption. How does a small business protect itself from these devastating effects? Answer: by taking business insurance from insurance companies like Budget Insurance. 

If you’d like to know how business insurance can protect you and your small business, this article is for you. In this article, you’ll learn what business insurance is, why you need it and the different types available from leading insurer, Budget Insurance.

What is business insurance and who needs it?

Incidents, like industrial action or supply chain interruptions, call for all businesses, especially small businesses, to have business insurance. When events like these occur, owners of such businesses can remain calm, knowing their businesses won’t have to shut down or face major financial losses. Business insurance is a type of cover that protects a business from financial losses due to events like theft, property damage or third-party liabilities. Some businesses, such as construction companies, perform risky jobs, which expose their employees to injury risk. Business insurance can come in handy in such unfortunate situations.

For example, if an employee gets injured while going about their business duties (injury on duty), it could be costly for your business to cover medical expenses. If you don’t cover such possibilities, the employee might press charges against your business, including suing for loss of income. Fortunately, there are different types of insurance for businesses that cover these types of claims. There is also specialist public liability insurance for specific industry verticals, like the medical profession, tradesmen and property developers. Why insurance for businesses is so crucial for your business?

Let’s illustrate this question with an example. A regular customer of a certain coffee shop once bought some coffee and sat down to enjoy it. Mistakenly, she spilt the coffee on her lap and suffered severe skin burns. She decided to file a lawsuit against the coffee shop and won it. The coffee shop ended up having to settle out of pocket because they didn’t have the right type of business insurance. 

If something like this were to happen to your business, would your business survive without facing huge financial difficulties? Many small businesses already struggle with generating enough cash to meet their month-end obligations, making it difficult to handle a lawsuit. This shows you just how important business insurance can be and why you should have it.

Five reasons you need business insurance in South Africa

There are a couple of reasons to have business insurance in South Africa, and here, we have hand-picked five you shouldn’t do business without.

1. Opens access to contracts that require it: Some contracts explicitly state that your business should have a certain type of business insurance before qualifying for it. This means that having business insurance can help increase revenue and profits. Isn’t that partly why you’re in business?

2. Protects a key person in the business: Every small to mid-sized business has a certain individual who’s key for it to thrive. What would happen to your business if you can’t operate anymore due to death or disability? Inevitably, the business will struggle financially, and may even shut down. Key individual insurance can help your business survive in case that person can’t work in it anymore.

3. It covers legal fees if a business gets sued: No one knows when an ex-employee or customer might sue you. For example, the customer could press charges against your business for failing to deliver on late delivery of your product or service due to a supply chain disruption. Legal fees can be expensive, and worse, if found guilty, you might go out of business. 

4. Helps attract new employees and keep current ones: New and current employees want to work for a company with the potential to last long. A business that can’t handle things like lawsuits won’t survive for long. Attract the right kind of employee with suitable insurance policies.

5. Protects against natural disasters: No one knows when lightning might strike your premises or property and cause fire, or when flooding might occur. If you have the right type of business insurance, you can cover expenses to repair or replace your property, restarting operations as fast as possible.

What does small business insurance cover?

Like all types of insurance, small business insurance doesn’t cover every event. There are different types of insurance created for specific purposes.

• General liability insurance: If you want your business to be protected in case a customer sues it about your products or services, then general liability insurance suits you. This type of insurance protects you and your employees against third-party allegations of injuries or damages to their properties in the course of doing business.

• Errors and omissions insurance: This insurance is also called professional liability insurance. It protects professionals like dentists, accountants, gynaecologists and consultants against lawsuits from their clients.

• Business interruptions insurance: consider what happened during COVID-19. Businesses can lose revenues. Other major events that can cause business interruptions to include hail, fire and flood. A lightning strike, for example, can cause a fire that damages your property. Business interruptions insurance can help your business navigate tough times.  

• Commercial auto insurance: This insurance type covers your business’s vehicles for events such as theft, damage due to hail or an accident. If your business has a fleet of vehicles, this kind of insurance is a must. Do you have employees who use their vehicles while carrying out business duties? An auto liability insurance will cover their car if they don’t have sufficient personal cover.

Get a business insurance quote from Budget

Getting affordable business insurance is easy. It begins with getting a business insurance quote so you can get tailored business insurance suitable for your unique needs. Budget Insurance prides itself on serving different types of industries and business sizes. Speak to one of our trained consultants for more information.