Five reasons why your business needs insurance

Ever tried claiming from your insurer, but told you’re not covered?

You’ve lost your precious asset and your hard-earned premiums have gone to waste. What then?

The recent increase in truck torching has been a wake-up call for some business owners – causing them to rethink their insurance plans to better prepare for unforeseen events.

Police Minister Bheki Cele, during a recent media briefing, said a total of 21 trucks had been torched across KwaZulu-Natal, Limpopo and Mpumalanga.

“Intelligence suggests the attacks on trucks may be business related, and we know these are not just random acts,” Cele said.

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Head of business insurance at MiWay, Jason Mellow, told The Citizen that entrepreneurs must beware the ever-changing risks faced by their respective industries.

When it comes to insurance, Mellow said risk-specific cover is more suitable, considering the needs and affordability of the business.

‘High risk, high premiums’

The insurance expert said premiums will always reflect “the inherent risk to the business”.

“The higher the risk, the higher the premium,” he added.

Mellow warned that a rise in criminal activity increases risk costs, which means insurers may be forced to increase premiums.

However, he also said a single isolated event may not lead to increased premiums.

“A couple of days of unrest may not lead to increase in premiums,” said Mellow.

“But if truck torching continues… then insurers will unfortunately have to increase premiums,” Mellow added.

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Claims

Mellow said multiple factors are considered when processing a claim, with the circumstances of each claim being unique.

“The validity of a claim is dependent on the cover as well as terms and conditions of the policy,” he said.

Do business owners have to prove anything? Mellow said there’s no burden of proof, but in cases of uncertainty, the insurer will appoint an independent technical expert to investigate.

“If the incident is due to politically motivated malicious acts, riots, strike, terrorism and public disorders, this is not covered by short-term insurance,” said Mellow.

“These incidents are specifically covered under the South African Special Insurance Risk Association (Sasria),” he added.

The expert said the insurer will assist the business owner by submitting information and relevant documents on their behalf, but the final outcome is communicated directly to the client along with payment.

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Insurance checklist

When choosing an insurance provider, it’s important to do your homework by comparing quotes to find a cover best suited for your business.

Here’s what you should keep in mind, according to Mellow:

• Identify specific risks in your business – for example – property damage, business interruption and likelihood of vehicle accidents.
• Identify available covers and limits – such as fire, theft and driver dishonesty. Assess the limits applicable to each cover to ensure your business is properly covered.
• Excesses and premiums – a higher excess could lead to lower premiums, but will require the business to pay a higher upfront fee during a claim.
• Exclusions and relevant terms and conditions – always read the fine print.
• Claims process – assess whether it suits your business model.