No business runs without risk. If you’re a business owner, you already know how an insurance policy can help your business survive challenges – some predictable, but most unforeseen. It’s not an expense any business owner enjoys paying every month, so you’d want to be sure that you have sufficient insurance to cover your specific risks, without paying for any unnecessary extras.

To do that, you need cover that suits your unique business needs. Here’s how to tailor generic business insurance to suit your personal risk appetite and cover your requirements.

Identifying risks specific to your business

When considering different types of business insurance, include all events that will impact your operating model.

For example, if your business is in the logistics sector, your most important asset is your fleet. An unforeseen event that grounds your entire fleet would have significant impact on your ability to continue operations. Comprehensive insurance will act as a shield to help you get your operations back on track.

Below are the most common types of business insurance available. Choose a fit-for-purpose insurance policy, knowing what will work best for your needs.

1. General liability

This is umbrella insurance for claims related to your business operations. If a third party is injured on your business premises or if your operations accidentally cause damage to someone else’s property, this insurance will cover the cost of damages. You can also add cover for damages caused by your products or defective workmanship to this policy section. Any business that works directly with customers and the public should have general liability insurance.

2. Directors and officers (D&O) liability

This provides cover for your company’s directors, officers, and senior managers, for claims made against them for alleged wrongful acts while serving in their business capacity.

3. Cyber liability

This cover protects your business against cyber-related risks like data breaches, data restoration, and cyber extortion. It’s essential cover to have if your operations are threatened by hacking or ransomware attacks.

4. Commercial property

This covers physical loss or damage to property, including buildings, stock, machinery, equipment, and all other contents, against defined events (like fire, theft, malicious damage, and natural disasters).

5. Business interruption insurance

Business interruption cover compensates for financial loss if damage covered under the property sections interrupts or interferes with your business.

6. Accidental damage

You need accidental damage insurance to cover your business property.

7. Commercial vehicle insurance

Any business that relies on a fleet should have a policy to cover all company transport, including company vehicles and freight. It provides comprehensive cover for accidental loss or damage to motor vehicles, including liability to third parties. Apart from insuring the transport itself, you can also get cover for the stock and tools required to keep your fleet maintained and on the road.

8. Goods in transit

If your business makes a product, you’ll need to transport stock to wholesalers or retailers – this cover protects your goods while they’re in transit.

9. Machinery breakdown

Avoid unplanned production outages by insuring your machinery against sudden, unforeseen damage.

10. Electronic equipment

You can also take out all-risks cover for mobile and non-mobile electronic equipment.

11. Commercial crime insurance

This protects you from employee dishonesty, third-party crime, and computer and funds transfer fraud.

12. Workers’ compensation

This is not a type of insurance policy that you can buy, but it is an expense you must include in your business insurance budget. You will be required to pay the government a monthly fee towards cover for medical expenses and lost wages if an employee gets injured or sick on the job. This fee is compulsory for most businesses that have employees.

13. Professional liability insurance

This policy serves professionals in high-risk jobs like lawyers, accountants, or consultants. It covers your business in case a client takes legal action against the business. Notaries, real estate agents, and insurance agents will also benefit from this type of cover. 

Assessing big-business insurance risks

How do insurance providers tailor coverage for large-scale retail and wholesale businesses with a high volume of transactions and multiple risk factors? Critically, they appoint a qualified, skilled, knowledgeable risk adviser whose key role is to help you put together a successful insurance plan.

This would include the following:

• A comprehensive review of your existing insurance plan.
• A risk assessment of your business.
• An in-depth interview to understand your risk appetite and risk coverage requirements.
• A custom insurance plan.
• Finalising and securing your insurance cover.
• Ongoing policy management and risk advisory service.
• Risk engineering or survey management and administration.
• Claims management and administration.

For these types of risks, it’s always better to have a risk adviser who can guide you on how to structure your policy to provide enough cover based on your needs and exposures.

Nedbank Insurance offers several business insurance options. Call one of our expert risk advisers for guidance on finding the best fit for your business.