‘Good to have’ versus ‘Can’t do without’. When it comes to business, these decisions can make all the difference to your bottom line. And while insurance ‘good-to-haves’ certainly offer comprehensive protection against all manner of risk, many businesses that are still reeling from the effects of the past two years may need to make some tough decisions – and focus their budget where it counts.
Insurance itself is seen as a ‘non-negotiable’. Even those who were forced to reduce cover as margins plummeted throughout the course of the pandemic have taken care to keep up where they can. Now, as South Africa’s tourism industry starts its recovery in earnest and bookings increase, it’s time to review the cover that your business needs and to re-evaluate its risk appetite.
But here’s the thing. While some types of risk might place you under the type of financial pressure that leaves you struggling for a while, others have the potential to truly damage your business in such a way that it is impossible to recover. And these are the risks that no business can afford to ignore in terms of cover.
1. Public liability
Obviously, as a business owner who is passionate about your clients and the industry, you do everything within your power to offer a safe experience. But accidents happen despite your best efforts, intentions and risk‑mitigation planning.
That’s why public liability is one of the most important types of available cover. This cover ensures that if a guest is injured or the guest’s property is damaged while making use of your product or service, you (as the business owner), your employees and the business itself are protected. We truly believe that this cover is one that no business should be without because the fall-out of a third-party claim against losses incurred because of your actions or negligence can be truly devastating.
2. Asset protection
You could argue that this one is a no-brainer. It has, no doubt, taken a long time to build your business and accrue all the assets required to make it a viable concern, and any threat to these could spell disaster.
Asset protection provides a cushion against such threats; it protects your investments by providing cover so that if damage should arise, you will be able to replace these critical assets. In short, this cover means that everything you have worked so hard for remains safe, no matter what.
3. Business interruption insurance
Business Interruption (BI) and Asset Protection go hand in hand, with BI following damages suffered due to insured perils under the Material Damage section. Although BI claims have been in the news for all the wrong reasons, the concept of business interruption protection has been around since the 18th century. Think of natural disasters that can cause damage to property or lost income because the attraction that initially brought the guest to your door has lost its attractiveness due to a defined event. Such losses have the potential to cause serious long-term damage. However, business interruption cover mitigates this by ensuring that the business is still able to cover overheads and ensures that you regain your lost market share. The cover lasts for the duration of the upheaval, making certain that you are still able to pay rent or salaries.
4. Digital risk protection
While cybercrime has been an issue for a long time, it took the pandemic and the increased use of digital platforms for remote working or online retail to bring it to the fore.
The use of collaborative platforms, websites and social media sites have changed the way we work and live, but their convenience comes with a significant risk: the greater your online presence, the easier it is for hackers to access confidential and private information.
This information can be used to make you a target of phishing and malware attacks and can put you at risk of data loss. What’s more, social media platforms can be hijacked by users, causing enormous damage to your brand and reputation. Since piracy, counterfeiting and customer scams are common, cyber threats can also leave you compromised from a revenue perspective. Furthermore, employees themselves may be put at physical risk as details such as their location become available.
Today, digital risk protection is a non-negotiable – but it is still overlooked by many business owners.
The best advice? As things shift and bookings pick up, it’s important to chat to your broker about your current situation and changing needs and ensure that the ‘non-negotiables’ are firmly in place.