SMALL BUSINESS INSURANCE
The insurance industry provides protection against financial losses resulting from a variety of disasters. By purchasing insurance policies, individuals and small businesses can receive reimbursement for losses due to car accidents, theft of property, fire and storm damage, medical expenses and loss of income due to disability or death.
The insurance industry consists mainly of insurance carriers (or insurers ) and insurance agencies and brokers. In general, insurance carriers are large companies that provide insurance and assume the risks covered by the policy. Insurance agencies and brokers sell insurance policies for the carriers. While some of these establishments are directly affiliated with a particular insurer and sell only that carrier’s policies, many are independent and are thus free to market the policies of a variety of insurance carriers.
Insurance carriers assume the risk associated with annuities and insurance policies and assign premiums to be paid for the policies. In the policy, the carrier states the length and conditions of the agreement, exactly which losses it will provide compensation for, and how much will be awarded. The premium charged for the policy is based primarily on the amount to be awarded in case of loss, as well as the likelihood that the insurance carrier will actually have to pay. In order to be able to compensate policyholders for their losses, insurance companies invest the money they receive in premiums, building up a portfolio of financial assets and income-producing real estate which can then be used to pay off any future claims that may be brought.
Online insurance quotes affords the prospective client the luxury of checking out available policies and benefits in the safety of their homes, without the pressure of an agent.
SMALL BUSINESS INSURANCE - What You Need.
So, you have created a small business concept and started your small business from scratch. Through hard work your business is successful and you reap the benefits of having a Small Business in South Africa. Have you considered what will happen if a disaster strikes – a violent storm or ill-health? Would all your efforts and hard work be wiped out and you small business profits disappear, or are your small business insured against such disasters? The key is to find small business insurance that is simple, thorough and affordable, yet your small business insurance solutions should be developed around your individual small business, taking into account your unique small business insurance needs and requirements.
The business insurance consultants that you eventually use should be skilled in terms of having the necessary knowledge for assisting your small business in making the most appropriate choice between the multitudes of insurance options which are currently available. Such an insurance consultant should have the ability to tailor-make an insurance solution for your small business in terms of your needs and risk exposure, thereby offering flexibility and reassurance during the process of selecting a small business insurance solution that is most suitable for your individual small business.
Whatever insurance company you use, it should provide effective small business insurance that includes cover for the most of the following:
•fire, explosion and earthquake
•acts of nature (wind, thunder, lightning, storm, hail, flood and snow)
•damage caused by bursting and overflowing of geysers and water pipes
•fire brigade charges
•vehicles or fleets
•stock and money
Most major insurance companies have policies that combine protection for all major property and liability risks in one package, called a business owners' policy. Business owners’ policies include property insurance for buildings and equipments owned by the small business. Any loss of income from your small business due to disruption of your operation and small business due to accidents such as fire can be covered under the Business Interruption Insurance.
Protection of Assets (Asset Protection Insurance)
The assets of a small business are a vital resource of capital, serving as great collateral. Therefore, effective protection needs to be obtained by all small businesses for adequate protection of their assets. Making sure that the assets of your small business are properly insured is essential in order to ensure success in the long run. Lack of insuring the assets of your small business such as vehicles, electronic equipment, buildings and stock insured can leave your business vulnerable to great loss due to crime and other unforeseen disasters and may put you at risk of losing your small business in the end.
Professional Liability Top
Do not forget, any small business is legally liable for any injury or damage it may inadvertently cause a client. This liability may arise from the failure of your small business to perform the required business operation – like not delivering on time. It may also arise from bodily injury or property damage caused by defective products, faulty installations and errors in the services provided.
Vehicle Insurance, Health Benefits and Disability Insurance
On top of cover for professional liability, your small business may also require vehicle insurance, worker's compensation or health and disability insurance. These areas of your small business administration may need additional and separate cover.
Vehicle insurance cover is available in a variety of options for those small business clients wishing to get the best vehicle insurance that they possibly can:
•Comprehensive Cover: covers your vehicle for accidental damage, theft and hijack, as well as injury to other people or damage to their property.
•Limited Cover: covers your vehicle for damage caused by fire, theft and hijack, as well as injury to other people or damage to their property, Accidental damage to your vehicle is not covered.
•Liability to Other People: covers you for liability to other people where an accident caused death or injury to them or damage to their property.
•Essential Cover: provides an option for older, lower value vehicles where you choose the combination of and amount of cover that you need.
In general, disasters like floods, earthquakes and terrorist attacks are not covered in the standard business insurance policies.
Protection against Flood Damage
If your small business is situated in an area that is prone to flooding, you need a policy that provides coverage against floods. With the threat of global warming and the “El Nino” phenomenon, even in South Africa flooding has become more regular disasters. If you do not want to loose your small business, make sure you do something in advance to cover that potential loss.
Protection against Earthquake Damage
Disasters like earthquakes normally are not covered by most standard property insurance policies such as homeowners and business owners' policies. If you live in an area that is prone to earthquakes, you need Special Earthquake Insurance Policy or Commercial Property Earthquake Endorsement. Once again, although earthquakes are not common in South Africa, we saw an increased in recent years of earthquakes in the mining areas in the north. So, be safe rather than sorry if your small business is situated in that part of South Africa.
Business Interruption Insurance
In the event of a major disaster hitting your small business, resulting not only in damages, but also temporary shutdown, you will be without an income for an extended period of time. This may be a period of several months. You need a separate cover which reimburses you for the loss of income during this shutdown period.
Protection against Terrorist Attack Losses
The threat of terrorist attacks in South Africa is low, but not impossible. Remember the ongoing trial of the “Boeremag”. In the United States of America, loss due to any act of terrorism is covered only for those businesses that have optional terrorism coverage under the Terrorism Risk Insurance Act 2002. In South Africa, most standard policies will exclude disasters by an act of terrorism or riot.
When looking for business insurance for your small business, the key focus should be on customer satisfaction. For this reason the small business insurance solutions that you decide on must accommodate the unique insurance needs of your small business. As such your chosen insurance company should supply you with personal as well as business options which have been specifically and individually designed for meeting the unique insurance requirements of your small business. Do not settle for anything less!