Common Business Insurance Mistakes
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Business insurance is not an optional purchase. Especially not in the 21st century, with its myriad risks that threaten more than just the physical or financial aspects of your enterprise.
With cyber threats, fraud, theft, natural disasters and more, all posing a potential threat to your day-to-day operations, it is imperative that the modern business owner ensure that he or she is prepared for any risk-related eventuality. In practical terms, this means finding the best business insurance company available in your market.
The South African insurance market is replete with insurers all claiming to be the best in the business for business, but how do you find the best one for you and your enterprise? And how do you avoid making the common errors that can render your business and its operations vulnerable to unsuccessful claims?
Insurance is too important to your business to take short-cuts or to be taking policies that do not meet your actual, real-life needs. So, make sure, up front, that you are not making the following common mistakes.
Prioritising low premiums
Minimising costs is important for the business owner navigating an economy as unpredictable as our in South Africa is. Sometimes you have to be creative about how you channel your resources, but don’t skimp on the insurance – at the end of the day, you’ll find you haven’t actually saved any money, when your business has to pay more to cover your losses in the event of catastrophe.
Lower premiums mean higher excess. Make sure that you know your business can afford the on-the-spot expense of higher excess, before deciding to cut costs on your monthly premiums.
Distinguishing between personal and professional vehicles
Remember that if you are using your personal vehicle in a business capacity, you will void any claim that you want to make, since your vehicle is only covered in its personal capacity. Even if you have personal auto insurance, you must make sure to additionally and separately cover any vehicle used for your business, under your business insurance policy.
Getting less than comprehensive business cover
Given the limits of their areas of operation, the owners of some businesses try to cut costs by getting less than comprehensive commercial cover – justifying the decision because “my business doesn’t do this and that, and so I don’t need to be covered for these things.”
Rather than make a decision based purely on the financial cost, discuss with your insurer or broker, what your actual and potential needs might be. You cannot predict the future and you do not know for sure what circumstances might arise – rather cover yourself for more than you need than less.
Avoiding fire or flood cover
Because of the location of your business or a particular branch, you might feel that the risk of fire or flood damage is too remote to concern yourself with. The problem with this thinking is that, even if natural disasters were not unpredictable, you cannot assume that the only reason for fires or flooding are natural causes. Manmade actions, or the failure of certain manmade safety features, can also results in fires or flooding – and so the physical location of your business does not necessarily keep it safe from these dangers. As such, it is up to you to ensure that your policy covers these concerns.
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