18 Types Of Insurance Cover Every Business Owner Should Know About

Everyone wants to be their own boss, but having your own business is hard work. The hours are long, the stress levels occasionally get cranked up a few notches, and being responsible for the financial well-being of others is a heavy load to carry. Then there’s always a bunch of stuff you constantly need to have your eye on, like looking at your business and identifying the risks that could put you out of business overnight. In our latest blog post we look at the types of insurance cover every business owner needs to know about (regardless of the size of the business).

It’s important to note that from around the mid 1980s a template for business insurance cover in South Africa was in place and it was called a Multi Mark 3 policy. Back in the early 2000s “the powers that be” decided to do away with the Multi Mark 3 policy template because it was deemed to be “anti-competitive”. Many of the insurance cover sections in the original Multi Mark 3 policy have been adopted by SA insurers today, and we have based this post on those original cover definitions.

  1. Fire Cover

Ok, so this insurance section is one of the most important cover options a business owner should consider. Fire cover doesn’t only cover your property against the risk of fire, but also explosion and lightening. The cover extends further and can include, among other perils, damage resulting from an earthquake, storm, wind, hail and snow.

  1. Office Content Cover

Pretty standard. This section covers your office property (like desks, chairs, filing cabinets, documents etc) against loss or damage from any of the perils covered in the fire section. Note however that electronic equipment is not covered under this section. We will handle that later.

  1. Buildings Combined

This insurance section is going to cover your building, walls, gates, landlords, fitting, driveways. Under this policy section you can also claim loss of rent and legal liability. This type of insurance cover is basically for landlords and property owners.

  1. Theft

Concerned about a break in? This is the insurance cover you need. Under this insurance section, you are covered against loss resulting from theft (naturally the theft needs to be accompanied by forcible entry).

  1. Business Interruption

If your business stops operating and your profits go down the toilet, you’ve got serious problems that could close your doors altogether. Under this insurance section, you can protect yourself against that eventuality (same perils as the fire section).

  1. Accounts Receivable

Do your accounting records hold a ton of value and without them you’ve got serious issues? Under this insurance section, you can insure against the loss of your accounting records which leaves you unable to trace the debit balances that are due to you.

  1. Money

The name is self-explanatory. You can insure against the loss or damage to cash, bank currency, cheques, money orders, card vouchers, for which your business is responsible.

  1. Glass

How much would it cost to replace your shop front window? A pretty penny I’m sure. Under the glass section of a business insurance policy you can insure against loss or damage. What type of glass doesn’t it cover? Internal and external glass, mirrors and sign writing.

  1. Fidelity

If you run the risk of having employees steal from you, this is the insurance cover you should be considering.

  1. Goods In Transit

Again, self-explanatory. Under this insurance section you protect yourself against the risk that your goods get damaged or stolen while in transit by road, air, sea, or rail.

  1. Business All Risks

Just like the “out and about” section of your personal car and home insurance policy, this insurance section covers business goods, that aren’t on your premises, against loss or damage. An example of this might be expensive off-site tools.

  1. Public Liability

Another big one. Liability cover is very important if you run your own show. Under this insurance section of a business insurance policy you are covered for legal liability for accidental death, bodily injury, illness or physical damage to property which has occurred during the normal course of business. A few other extensions are available under this section of cover (Defective Workmanship, Work Away and Product Liability).

  1. Employers Liability

Covers you, the employer, against legal liability if your staff suffers bodily injury, illness or dies while under your employment contract.

  1. Group Accident

Your business can nominate the employees it would like to cover within the business and if any of them have an accident (bodily injury caused by violent external means) you can claim.

  1. Motor

This is the section under which you insure your motor vehicles. Enough said really.

  1. Electronic Equipment

All electronic equipment, including computers, get insured under this section of the business insurance policy. So, if you have an office, the desks, chairs, filing cabinets etc would fall under the “office contents section” & the computers, servers, and tablets would fall under the “electronic equipment” section. Notably laptops (which leave the premises) are often insured here.

  1. Machinery Breakdown

Covers you against any unforeseen and physical damage to your machinery. Again, pretty important stuff if you are reliant on your machinery to drive your business.

  1. Deterioration Of Stock

Under this section you insure against the loss or damage to your property (stock). Need a quick example? Perhaps you run a restaurant and your fridge bombs out and as a result you lose R10,000 in stock. This is the section of the business insurance policy you can claim against.

There you have it. Those are just about all the business insurance sections you would have found under the old “commercial insurance” template in SA. Some of these sections of cover might have been merged together by insurers looking to simplify things for their policyholders, but the risks they cover still exist.

Until Next time

The Wise About Life Team

 

 

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