In South Africa, monthly insurance premiums are expensive. Whether it’s for your personal protection or that of your business. Personal insurance is straight-forward – it’s usually insurance to cover you in the event of an accident or theft, or life insurance.
Business Insurance is different though. Why? Because a lawsuit filed against your business or an employee getting injured on the business premise could lead to your financial loss. Imagine losing everything that you’ve worked so hard for, because your business is not insured…
Here are some examples of where you could enjoy the benefits of business insurance:
Your business is unable to operate
What happens if the machine you use to manufacture your products with breaks down suddenly? If your business is unable to produce products to sell, it will run at a loss. Business insurance can cover you for that time or amount that you have lost.
If an employee is injured while on duty – whether it happens at the business premises or during working hours while attending to work-related duties – you as the employer could be held personally responsible for the damages or loss. Personal liability insurance is one of the most important aspects of business insurance – it can assist you in having to sell your personal assets to cover the employee’s damages.
A client files a lawsuit
If you have a client who is unhappy with your product or the product you have sold to them has been the reason for injury or financial loss, you could again be held responsible. When a client files a lawsuit, your insurance company could assist you with paying the legal fees as well as the settlement fees if it is required.
Financing of machinery
When you purchase machinery and a company or bank finances it, that lender will usually insist that you take out appropriate business insurance. The aim is to avoid financial loss when you can’t afford the repayments of the loan.
There are many reasons why businesses often decide not to take out business insurance – some believe it’s simply too expensive while others simply forget. The reality is that you just can’t afford not to have business insurance. In fact, once you have experienced the benefits of business insurance, you will realise that it makes business sense.