Top tips for making sure you buy the best insurance for your business

 Most businesses and business-owners are aware that insurance has a vital role to play in helping them to mitigate the risks they face, and to help ensure that they can recover from disasters. But most business-owners are too busy to ensure that they are taking out the right kind of cover. This inattention to detail can be extremely costly when a claim has to be made.

MiWay has identified several issues that busy business-owners should consider in order to make the right decision when it comes to business insurance:

Get the right cover for your needs.

Standard commercial policy wording allows one to cover a particular item for different types of loss in various sections, making it hard to be sure you have that item properly covered. The real answer is to look for an insurer who offers you an easy-to-understand policy, one that makes it clear what the item is insured against. Also make sure you make use of the insurer’s representatives or call centre to explain different cover options to you.

A critical point to consider is the excess payable on claims. A cheap premium may mean that the excess you would have to pay is too high. Some excesses are stipulated as a percentage of the insured value or the claim. For many business insurance clients, good advice would be to seek out a policy that offers a predetermined/flat excess rather than the percentage option—this means there are no unpleasant surprises and it is easy to budget for excess payments.

Consider all-risks cover for your business.

Personal all-risks covers all items that an individual would usually carry around with him- or herself: jewellery, mobile phones and laptops are good examples. The same principle holds good for business all-risks, but the range of items covered is much wider. Business owners would obviously specify laptops and mobile phones, but they should also include other items of equipment used to deliver their services at third-party premises. This equipment would not be covered by a standard office-contents policy.

For example, a catering company that takes bain-maries, crockery, cutlery and napery to client premises would need all-risks cover — or risk heavy losses if there is theft or even a vehicle accident en route.

A good all-risks policy would also provide cover for insured items worldwide for a limited period, as well as accidental damage — for example, when you crush your mobile phone crawling between two pieces of furniture to reach a power outlet for an offsite presentation.

Pay special attention to vehicle insurance.

Many businesses are dependent on vehicles of one sort or another, so the correct cover is vital. It’s critical to insure for the right amount. Some trucks and larger commercial vehicles are not noted in the TransUnion Auto Dealers’ Guide, which is typically used to determine vehicle value. In addition, accessories and modifications for larger business vehicles can be worth more than the vehicle itself.

Another point to remember is that mechanical breakdown is not covered by vehicle insurance, so it would be best to get specialised cover to ensure that when your delivery vehicle breaks down, your business doesn’t as well.

Ensure goods in transit are insured.

Moving goods between two points is risky, whether they are your own equipment or a delivery for a customer. The goods can be lost if the vehicle is stolen or hijacked, or the goods themselves might be the target of criminals — cigarettes in transit are particularly attractive, it seems. Goods and equipment could also be mishandled by the people doing the transporting, be they your own staff or employed by a carrier.

The first thing to do is to establish who has the financial interest in the items being transported. If more than one party is involved, agree the amounts each should contribute for indemnification. Choose a reputable carrier which has its own risk-mitigation measures in place, and ensure that the items are properly packed; this will reduce premiums.

It is also advisable to compile a detailed inventory of goods to be transported, and to ensure that items are checked on arrival to simplify any subsequent claims process.

For more information on business insurance visit www.miway.co.za.

MiWay is an Authorised Financial Services Provider (Licence no: 33970)

[Article by Mornè Stoltz, Head of Business Insurance at MiWay]