The festive season is here, a traditionally busier and riskier period for most businesses.<\/p>\n
To start the New Year without incurring unnecessary financial losses it is important to understand your exposure and responsibility as a business owner.<\/p>
David Wedderburn, regional manager of the corporate and business insurance division at Standard Bank, said: \u201cAs a business owner, understanding your insurance cover and ensuring you have enough to mitigate all your possible risks can save you from potentially devastating losses.<\/p>\n
\u201cIt should never be taken for granted that all losses your business could incur will be covered by your policy, since any foreseen risk that is not reasonably avoided may result in your claim being rejected.\u201d<\/p>
Wedderburn encourages business owners to carefully review their policy, to understand the risks for which you are covered is the first step to making sure that you are adequately protected during the holidays.<\/p>\n
\u201cNot all \u2018comprehensive\u2019 insurance policies are the same, so it is vital to understand your policy\u2019s terms and conditions, not only to mitigate your risk, but also to be aware of any areas where cover may be insufficient,\u201d he said.<\/p>\n
The end-of-year rush often results in businesses, large and small, having to increase their stock levels to meet increased demand.<\/p>\n
\u201cIn this instance, adjustments to insured stock values and disclosure of any additional storage locations may need to be considered, since the sum for which it was initially insured may not be sufficient to cover the latest replacement value,\u201d explained Wedderburn.<\/p>\n
\u201cFurthermore, most businesses haven\u2019t considered the effect our fluctuating currency value has on their insured imported stock values,\u201d<\/p>\n
\u201cThe recent weakening of the Rand against the US Dollar may result not only in the under insurance of stock values, but also the under insurance of electronic equipment, for example, and business interruption.\u201d<\/p>\n
Security, too, is of great concern over the festive period, since certain businesses may be left vacant for a few days or weeks while staff and owners take leave, increasing the risk of burglary.<\/p>\n
\u201cWhile this is not an event that anyone can actually foresee, businesses must take the necessary security measures in accordance with their insurance requirements, both at the primary premises and at any additional ones,\u201d Wedderburn said.<\/p>\n
This may include having alarm systems tested by security service providers and ensuring that any maintenance on the security system is up to date.<\/p>\n
\u201cAs in other aforementioned instances, a claim can be rejected in the event that these measures were not taken, even if the owner set the alarm before closure.<\/p>\n
\u201cIt is also necessary to notify your insurer should your premises be unoccupied for more than 30 days, as this may affect the extent of your cover,\u201d he explained.<\/p>\n
Where money is collected or transported, Wedderburn advises business owners to adhere to all insurer requirements and warranties, vary banking times, routes and frequency.<\/p>\n
\u201cTheft is not the only risk a business faces, so it is important to check electric circuits and distribution boards for faults or hotspots, to minimise the possibility of electrical fires,\u201d he said.<\/p>\n
Wedderburn further added that fire prevention also includes servicing and maintaining fire extinguishers and hose reels in accordance with the manufacturer\u2019s specifications and local bylaws.<\/p>\n
In some parts of South Africa, December falls in the rainy season, so, to avoid flooding or water damage, business owners are advised to regularly clear all gutters and storm water drains.<\/p>\n
\u201cHail is also a problem, and we have seen several devastating hailstorms in recent years.<\/p>\n
\u201cMany insurance companies send out notifications to their clients preceding inclement weather, so make sure that your contact details on record are up to date – this can assist you to make provision for your fleet managers or drivers to receive notifications and so take preventative measures,\u201d Wedderburn said.<\/p>\n
In closing, Wedderburn reminded business owners that: \u201cA business is the livelihood of its employees, the owners and their families, and, sometimes, whole communities.<\/p>\n
\u201cIf it is not adequately insured, or is completely uninsured, the collective financial consequences could be overwhelming.<\/p>\n
\u201cAccess to various insurance policies is readily available, and it\u2019s easy to speak to your financial advisor to select a policy that best suits your business\u2019s needs and your finances,\u201d he said.<\/p>\n