In planning for the year ahead, small business owners should review their insurance policies to ensure they are adequately covered against insurable risks.
Every year businesses face unique challenges ranging from credit and market risks, technological disruptions, compliance, operational and regulatory risks, amongst others. As a matter of precaution, insurance policies should at least be reviewed or updated once a year.
- Employee movements If there are any employees who have left or joined the company, ensure that your policy is updated accordingly. This type of cover normally depends on the role and contribution of the employee to the business. For instance, directors may be covered for key person insurance and directors & officers liability insurance.
- Protest action This year is the national election year and leading up to elections we can expect to see an increase in the frequency and severity of protest action, riots and strikes. Thus, it is essential to ensure that adequate special risks cover is in place from the South African Special Risks Insurance Association (Sasria).
- Cyber risks It is essential to communicate with your insurer or broker and find out if there are any new risks that your business should be protected against. Cyber attacks continue to be a major risk for businesses especially in the SME sector. Over the last couple of years there has been a major increase in the number of reported cyber incidence. More businesses are now facing increased cyber threats due to their increased dependency on technology, relating to their internal and customer data being compromised by fraudsters. It is therefore essential to have some form of cyber risk insurance cover and/or enhancement of data security protocols.
- Regulatory changes Every year there are a number of regulatory changes that impact businesses directly or indirectly, which may result in fines and penalties for non-compliance.
- Natural catastrophes The increase in the frequency and severity of extreme weather conditions, coupled with intensifying natural catastrophes will continue to have a significant impact on businesses, so they should be adequately protected against these risks to avoid incurring sever financial losses.
- Business changes Should a business consider moving to a new location, purchasing new premises or venture into new business activities, these types of changes could have a major impact on its risks profile. As a result, the policy needs to be updated accordingly.
- New and enhanced products An innovative culture has taken over the insurance industry and ever so often we see the introduction of new products or the enhancement of existing products. Get in touch with you broker to advise you on any new products that might add value to your existing insurance portfolio.