SMMEs should not forget short-term insurance cover - Mutual & Federal

The 2010 FIFA World Cup is expected to bring a myriad of opportunities to South African businesses. Small, Medium and Micro Enterprises (SMME) in particular will have the opportunity to take advantage of some of the lucrative prospects that will accompany the influx of tourists visiting the country during this spectacular event.

However, Mutual & Federal, one of South Africa’s leading short-term insurers cautions SMMEs, especially those operating from their homes, of certain insurance implications that could potentially cripple new businesses.

Edward Paul, general manager for Product, Actuarial and Reinsurance at Mutual & Federal says, “When starting or expanding a business on residential premises it is very important for owners to put together a comprehensive business plan that considers costs for insurance cover. While the business might be poised to be a stellar success, if the need to claim arises and the correct insurance cover does not exist, the costs to replace the damaged or stolen goods could cripple the business.”

Whether the home is being used as a guesthouse, or a small part of the premises is utilised to manufacture souvenirs for instance, the business owners need to ensure that they have consulted with their short-term insurance advisor or broker to obtain the necessary insurance cover.

Paul continues, “Setting up a business can be a costly affair and it’s important to get the right insurance cover to suit your business needs. Insurance advisors exist to help business owners find the correct insurance cover and Mutual & Federal encourages all SMMEs to check that they are adequately insured before the need to claim arises.”

There are many agencies that could assist young entrepreneurs in doing an in-depth risk analysis on a business. A closer investigation into the risks facing the business will help owners tailor their insurance policies to suit the company’s needs.

In conclusion Paul says, “It takes a lot of dedication and hard work to set up a business and obtaining the right type of cover will allow the business owner to focus on growing the business without having to worry about the unexpected risks facing the company.