The ABC of insurance for small businesses



Insurance is an important for small businesses as it is for corporates. With all the focus being on how to make a business work, other important factors can fall through the cracks and that is why it is important to pay heed to the ABC of insurance for small business.

Starting a business can be challenging at the best of times, from securing funding to identifying potential collaborators and clients. There are plenty of obstacles to overcome on the road to successful entrepreneurship.

While new business owners tend to prioritise growth strategies, they often fail to focus on the ‘what if?’ factor, overlooking the potential risks that their enterprise might encounter down the line.

While business owners in traditionally high-risk industries, such as trucking, tend to be more aware of the need for curated cover given the regular transit of valuable goods, other entrepreneurs often make the mistake of underestimating possible risk factors to their operation.

This makes them vulnerable to potentially devastating losses, Jason Mellow, head of MiWay Business Insurance, says.

“Given today’s economic climate and ever-increasing overheads, businesses and SMEs in particular, simply cannot afford to operate without the correct insurance cover in place. And given the variety of business insurance options now available to up-and-coming entrepreneurs, there is simply no reason to run unnecessary risks,” he says.

Many entrepreneurs only become aware of potential risk factors when it is already too late, but while a business, such as a beauty salon might seem relatively risk-free, that is not necessarily the case. Accidents can happen anywhere and you could be liable for significant damages that your business might not be able to afford.

Mellow encourages small business owners to consider these commercial insurance solutions based on the nature of the business:

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Insurance for beauty salon owners

It is summer and this means that hair and beauty salons are typically booked way in advance. However, this financial boom can be put at serious risk if your equipment is not properly insured. It is critical for small business owners in the beauty industry to ensure that their machinery is covered and specified in their insurance contracts to enable you to quickly replace it without hampering service delivery.

Mellow says it will also be a good idea to invest in liability cover to protect your interests in the event of third-party claims, which can arise should a customer or staff member be injured on your premises or as a result of your business offering.

“It is also worth remembering that if you use one or multiple vehicles for business purposes, even if it is your personal car, it should be covered and specified under your commercial insurance policy.”

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Insurance for restaurant owners

The restaurant industry is also booming and typically characterised by significantly increased takings. However, the anticipated profits of a bumper festive season could go up in smoke if you do not take the necessary precautions in advance.

In this case, your equipment is also key to ensuring you can meet increased demand and you have to ensure that all your vehicles, ovens and other specialist machinery are accounted for on your insurance policy.

Business Property Insurance is also necessary for restaurant owners, as it provides cover not only for your premises, but also the equipment in the event of accidental damage, theft, fire, burst pipes or natural disasters, Mellow says.

You should also consider adding Emergency Assistance that gives you the option to call on specialists such as locksmiths, plumbers and security guards in the event that something goes awry. And with load shedding likely to continue for the foreseeable future, you might also want to look into Stock Insurance, which offers you recourse should any of your raw materials be damaged as a result of power surges and cuts.

“Like their fellow customer-facing counterparts, restaurant owners would also be well advised to ensure they have some form of liability cover in place to protect themselves against claims arising from unforeseen perils.”

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Insurance for artisans

Small businesses running mobile operations such as electricians, glass fitters or plumbers, are typically more exposed to risk given the fact that they spend a lot of time on the road. As these operations expand, it is important to ensure that the cover in place remains comprehensive, particularly when multiple vehicles are used on a daily basis, Mellow says.

If, for example, you listed a single regular driver for a vehicle but have since expanded your operation and now have multiple drivers behind the wheel, you could find yourself in difficulty when it comes to claiming, as your monthly premium does not accurately reflect your risk factor.

In this case, Mellow says, it would be better to opt for a Multiple Driver cover option, which allows for up to five individuals to be listed as regular drivers of the same vehicle, or Pool Driver Insurance, which offers even greater flexibility and does not require you to specify who is behind the wheel at any given time. The Pool Driver option is more flexible but does mean a higher premium to cover this increased risk.

He adds that Employer’s Liability Cover is necessary for employers managing a mobile workforce, as this offers you protection and peace of mind in the event of an employee getting injured for any reason at work, be it due to a dog bite or an unexpected fall.

There is also Broadform Liability, which protects you against a variety of incidents such as public liability, defective workmanship or accidental damage to a customer’s property and Mellow says this is also highly recommended in this case.

“No matter what industry you are in or the size of your business, insurance is essential and overlooking your insurance can negatively impact your business should an incident arise. Therefore, if you’ start up a new venture or want to expand an existing one, protect the business you worked so hard to build by consulting your insurer to better understand your risk profile and make adequate provisions for any possible eventualities.”


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