Rising commercial crime places SME's at risk

Crime statistics published by the South African Police Service (SAPS) have shown that commercial crime is one of the few types of criminal activity that is continuing to rise in South Africa. The report revealed commercial crime increased by a staggering 295.3% between 2003/04 and 2009/10, highlighting the risk small business owners are taking by failing to have adequate insurance cover in place.

Official SAPS figures for the 2009/10 financial year revealed that business robberies increased by 4.4% to 14 534 this year from 13 920 cases in the 2008/09 year.

According to JonJon Smit, sales director at CIB Insurance Solutions (CIB), business owners need to ensure that they have adequate insurance in place to protect themselves against this threat. “Given the current economic climate it is understandable that many small businesses feel that they are strapped for cash, however, in light of the alarmingly high rate of business robberies, it is crucial that SME’s have the correct cover in place.”

“Crime is a serious issue for any company, but for a small business the effect can be hugely significant. If stock or cash is stolen, or machinery maliciously damaged during a robbery, it can have a devastating impact on a business,” says Smit.

With around two million small businesses in South Africa, employing just over half of the country's total labour force, the SME market is crucial to the continuing growth of the South African economy, particularly in the current economic environment. According to the annual SME Survey released last year, small businesses continue to view crime as the biggest threat to the sustainability of their business.

Smit says there are insurance policies available which cater specifically for SME’s and are packaged to suit the individual needs of each business owner. “Every business is different and faces its own unique challenges. It is therefore vital that small businesses consult with a broker to ensure that their insurance policy covers all eventualities and is appropriate for their needs.”

He says small business owners should take the time to speak to their broker about the specific threats their business may face. “By being proactive and taking the time to identify any weaknesses in your company’s security systems you can reduce the risks your business faces.

“Security measures such as alarm systems, surveillance cameras or window bars can also help to lower the premiums for a business as it minimizes the risk of a crime being committed with the result that fewer claims will need to be processed.”