By Vanessa Papas
When it comes to business savvy these celebs have it aced. Gwyneth Paltrow’s Goop – a website and online retail destination – serves up branded beauty products and fashion. Jaden Smith, son of Will Smith and Jada Pinkett Smith, opened a boxed water business. Jessica Biel launched a kid-friendly restaurant, marketplace, and activities centre in March 2016 in West Hollywood, called Au Fudge, while George Clooney launched his own tequila brand.
With the new year rolling in, many people are celebrating another successful term of owning their own businesses. However, Theunis Fourie, head of insurance brokers at FNB, says business owners who overlook having insurance in place face the risk of, worst-case scenario, liquidation, should the business face liabilities. Theunis says when it comes to insuring a business a one-size-fits-all approach often doesn’t work, as every business is different and faces unique risks. Therefore it is essential to consult your broker to get proper advice on the best suitable cover for your business insurance needs.
What Is Business Insurance?
The term ‘business insurance’ encompasses all the different types of coverage available to protect business owners from losses. Through business insurance you can cover your property and business vehicles, insure against legal claims against the business such as liability or workers’ compensation, and also provide health insurance for your employees, among other things.
Why Do I Need It?
There are key insurance risks that every uninsured business faces. These include complete shutdown (uninsured businesses face a higher risk of being shut down due to a variety of unforeseen events such as riots and liabilities); creditors (should the business shut down for whatever reason without having insurance in place, the owner would still be liable to creditors); personal income (if your business shuts down it can also affect your personal circumstances as you may be left with no personal income); salaries (should employees be impacted by business risks, insurance can be used to cover salaries for a specific period), theft (this is a common risk for all businesses, particularly retail businesses); damage to property (this may result in the business losing assets and valuables due to fire or unforeseen events); key person insurance (if the survival of the business is dependent on its partners being available, it is essential to take out key person insurance which can provide cover following the death or disability of a key individual), as well as loss of profits (any financial mishap which may result in the loss of revenue places a risk on the survival of the business).
Should Workers Also Be Covered?
Once the first employee has been hired, workers’ compensation insurance should be added to a business’ insurance policy. This will cover medical treatment, disability and death benefits in the event an employee is injured or dies as a result of his work with that business. Even if employees are performing seemingly low-risk work, slip-and-fall injuries or medical conditions such as carpal tunnel syndrome could result in a pricey claim.
What If I Work From Home?
Many professionals begin their small businesses in their own homes. Unfortunately, homeowner’s policies don’t cover home-based businesses in the way commercial property insurance does. If you’re operating your business out of your home, ask your insurer for additional insurance to cover your equipment and inventory in the event of a problem.
How do I know what insurance to choose?
IT is essential to seek professional guidance to structure an appropriate insurance solution for your business’ specific insurance needs and requirements. This will enable you to make the best choices when it comes to protecting your assets and the security of your business. Obtain and compare multiple quotes from reputable carriers and independent insurance agents. You can get quotes online or in person. If you are a member of an industry organisation, check to see if they have a recommended insurance provider. It’s also often beneficial to talk to other business owners to see who provides their insurance and whether they’re satisfied.