MJD Risk Insurance Brokers

Short Term Insurance and Risk Management Consultants

“Partners in your Risk”

Cutting back on business insurance when times are tough can really be tempting. After all, every cent counts, especially when sales are down or clients are taking longer than usual to settle their bills. That temptation could be short-sighted and end up costing you, as the business owner, far more than what you have saved by cutting your insurance.

This is especially true when it comes to business insurance, which often provides protection for more than just equipment, vehicles and other physical goods.

Insuring a business, no matter the size, is more complex and involved than protecting one’s personal possessions. For instance, you should consider liability cover that is needed to ward off the potential of a business being sued by disgruntled customers. Business interruption cover is equally important as it protects against losses should you be unable to operate because of a disaster or unforeseen event.

Other forms of cover include a policy that protects you against the threat of staff dishonesty or, even worse, the death or injury of an employee during the course and scope of their work. Should any of these events take place, and your business is not adequately insured to protect it against the adverse impacts, there is a good chance it may not survive.

While you may want to reduce insurance costs, you should make informed decisions about how you go about it.

The first step would be to make a proper assessment of what is covered by your business insurance policy. You may find you have cover for equipment you no longer own, or the replacement value of items may be lower than what is covered in your policy. Many commercial policies automatically include extensions that might not be relevant to your business but for which you pay a premium every month. For example, cover for wrongful arrest (meaning you wrongfully arrested someone) if you own a beauty salon or Money cover if you are a software developer that doesn’t keep any cash on premises.

Second to reviewing your business insurance cover, you can also look to reduce your business risks, which could impact your monthly premium. This could include beefing up the security of your premises or installing surge protectors on the power supply to expensive equipment. Installing vehicle tracking devices is another way that a business can lower its risk profile.

It is not always easy for business owners to see the big picture when they are in the trenches, fighting to live another day, but there is extreme wisdom in protecting your business and your interests against unforeseen circumstances by retaining your insurance cover.

By Christiaan Steyn, Head of Business Insurance at MiWay

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