In light of crippling looting and damage to property experienced in Zimbabwe last week, businesses have awoken to the fact that insurance cover is a must for any business. The monthly premiums may be painful to pay but the benefits of having sound insurance cover need not be overemphasised. For smaller businesses, the risks are always higher as they may not have any extra cash stashed away for a rainy day. Fortunately, there are a number of insurance policies that businesses, both big and small, can take out. We look at these in more detail in this article.
Auto insurance
The main purpose of a comprehensive motor vehicle insurance policy is to cover the policy holder against vehicle damage and/or injury resulting from accidents. It can also provide cover for third parties whose property may be damaged in an accident as well. Some companies opt for group personal accident cover which covers for death, temporary and permanent disability and medical expenses emanating out of an accident. For companies relying heavily on transportation of goods by motor vehicles like bus companies and haulage truck businesses, this is ideal. The cost of doing business using uninsured vehicles can be unbearable if things go wrong. Injury and loss of lives may result in litigation and huge financial losses may follow. Insurance cover mitigates the impact of this possibility.
Fire and associated perils
This type of cover caters for damages resulting from fire and associated risks. It normally covers costs related to replacement and repair of damaged property. Damage to be covered may include lightning, storms and flooding. Equipment that can be covered under such insurance includes computers, office furniture, machinery and manufactured stock. Interestingly, many buildings and business premises were gutted by fire towards the end of last year with the Glen View furniture market being the most notable. Those who had not insured their furniture lost out big time.
Theft and fidelity cover
This is meant to provide insurance against losses resulting from break ins. Usually, the theft should be as a result of forced entry into insured buildings. Last week’s looting would fall into this category. Some insurance companies cover against financial losses caused by dishonest employees carrying out fraudulent activities. This is usually called fidelity cover. Others also cover against loss of money or goods in transit. With the increase in cases of robbery in the country, businesses involved in moving valuable goods and money should consider this type of cover urgently.
Business interruption cover
Business interruption cover deals with loss of income arising from occurrences that stop the business from operating normally. Usually, losses are caused by natural disasters and other occurrences which are unforeseen. This kind of policy covers the profits that would have been lost as a result of interruptions. The interruptions should be beyond the company’s control. Luckily, Zimbabwe is not prone to inclement weather conditions often and the risk is limited in this regard. However, this insurance cover cannot be ignored completely. Heavy rains and destructive winds come once in a while.
Industry related insurance
Some insurance policies are industry related. This means that they focus on risks associated with specific industries. For farmers, crops may be destroyed by fires and bad weather. Livestock may also be covered against several specific perils. For the engineering industry, cover may be against mechanical breakdowns. It is important for business owners to research around what risks are associated with their business and what cover they need to mitigate against those risks.
Businesses are unique. Therefore, you need to look at your own business and how it can be covered. Your insurance policy should be adequate to protect you, your employees and your assets against risks most of which are peculiar to your type of business. Business owners should understand the need for insurance cover in Zimbabwe by now.
