Running a small to mid-sized business in South Africa today is fraught with challenges. For many businesses, a major setback can not only put the business at risk, but can destroy your entire livelihood. While it’s impossible to prevent incidents, well-prepared businesses can manage their risks through a comprehensive business insurance portfolio that mitigates the damages and after-effects.
“Putting your head in the sand and thinking ‘it’s never going to happen to me’ is a slippery slope to disaster,” says Wynand van Vuuren, spokesperson at King Price. “All companies are prone to risk, but being properly prepared can save you from the worst. Good risk management is a combination of processes, procedures, and insurance.”
Van Vuuren says there are five major areas where every SME should be mitigating their risks in 2018.
Defend your castle, and everything in it
Make sure you’re managing risks around three key areas: business interruption, liability protection, and property insurance. This will protect your business property in the event of a fire, natural disaster and breakage, and ensure that your machines, inventory, tools and even business-critical documents are covered.
Protect your people
Workplace injury or illness is far more common than many small businesses may think. Employee compensation coverage is vital to protect both your employees and the business itself in the case of workplace accidents. You can also do a lot to prevent accidents from happening by making safety a priority, and minimising risks through safety best practices and regular emergency drills.
Lock up your data
King Price estimates that small businesses lose millions of rands every year through cyber attacks, which can cause major disruption to business. A good cyber insurance policy covers your computer systems, software and data; protects you against liability arising from cyber-attacks; and includes cover for cybercrime, data breach expenses, damage to computer systems and data, and associated loss of income.
Keep the wheels of industry turning
If your business owns and uses vehicles in its operations, you can’t afford any downtime or losses through collisions, theft and damage. It’s also important for SMEs to be covered against eventualities like unlawful ‘borrowing’ of vehicles and third-party damages in case of accidents.
The inside job
Financial loss through fraud or dishonesty by an employee can close your business. Rest easy with insurance against fraud, dishonesty, or the theft of money or other property by an employee, and manage the risk through proper controls – like limiting a bookkeeper’s direct access to your bank account, and having bank statements sent to your personal email account.