Running your own business can be stressful and therefore business insurance cover is essential for peace of mind, says Port Elizabeth financial planner Pieter Willem Moolman.
Business insurance may seem like an unnecessary expenditure but many small business owners only realise its value when they need to claim. You simply can’t afford to be without it.
The right cover for you will depend on the nature of your business. Although you do not need to invest in every possible product that is on the market, there are a few key areas that you need to cover.
An experienced short-term insurance broker will be able to assist you with a risk assessment to ensure that you have business cover when and where you need it.
A comprehensive insurance package should protect both your physical assets and human capital.
In this article, we will highlight the key aspects of physical cover (with more on human capital to follow):
- Property insurance – Your buildings, stock and equipment should be covered for storm, fire and flood damage, as well as criminal acts like theft and vandalism.
- Auto insurance – This is essential if your business is based on the transport and delivery of goods or makes extensive use of sales representatives.
- Business interruption insurance – This ensures that your operating costs, including salaries, can be paid in the event of a disaster that interrupts daily operations and results in a loss of earnings.
- General liability insurance – This covers any damage or loss suffered by a third party while on your business premises. It can include product liability cover, professional liability, defective workmanship and off-site cover if you work on your client’s premises.
- Credit insurance – If you have big start-up loans or if defaulting debtors could cripple your business, credit insurance is something to consider.
- Email and internet insurance – Online platforms have created new arenas for liabilities and losses, such as data loss due to viruses and libel claims on the web, so many insurers have created products to match.
Chat to your short-term insurance broker about the right business insurance for your needs. A qualified broker, such as those at PWM Financial Management in Port Elizabeth, will make sure you are neither over or under-insured.
This article is based on the original that appeared in Your Business magazine.
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