Tips for Getting The Right Business Insurance for your Job or Company

Running a business without having business insurance (also called commercial insurance) can be catastrophic. Business interruption events, such as the COVID-19 pandemic, cause earnings to plummet, making it difficult to cover expenses. Your business doesn’t have to go through such rough times if you’re adequately protected.

Dialdirect is not only concerned about the survival of your business, but also wants to empower you. This article will bring you up to speed on everything you need to know about insurance for business. Discover what it is; the different types of business insurance, who needs it and why.

Types of business insurance

Business insurance is an umbrella term, which includes numerous types of insurance cover that are designed to protect a business. For instance, a policy can protect against some of the following:

• Business interruption: This is vitally important in case an event, either natural or man-made, temporarily brings the operation of your business to a halt.

• Legal claims: Customers, suppliers or strangers could bring legal actions against a business for reasons such as negligence or damage to property. 

• Damage to your reputation: In this day and age, your business could suffer reputational damage in many ways, including data breaches and social media.

As soon as a business owner opens the door of their company, they face risk. For example, the company vehicle and driver may knock over a pedestrian in town or damage someone’s property. Would you be financially prepared to handle such events? If you have the right type of business insurance, you can, because it’ll cover you for financial loss due to events such as theft, public liability, fire or water damage and unexpected lawsuits.

Without commercial insurance, a single legal action could wipe out your business, resulting in a significant financial loss. 

However, because business needs differ, it’s necessary to have different types of business insurance, such as:

• Commercial insurance: This protects you against fire damage, theft, negligence, public liability, goods-in-transit losses and many other business risks.  

• Commercial property insurance: This covers your commercial property, such as buildings, in case of damage due to theft, natural disasters or fire.

• Errors & omissions insurance: This protects companies and professionals — such as accountants, medical professionals, lawyers and architects — against allegations of negligent actions or inadequate workmanship.

• Commercial truck insurance: This covers 10-tonne trucks in the event of theft, accidental damage, fire and natural disasters.

Business insurance for entrepreneurs & small business owners 

Entrepreneurs and small business owners are a crucial part of South Africa’s economy. Not only do these people create 50% to 60% of jobs in South Africa[1], but they also generate about 34% of the country’s annual income.

Small business owners and entrepreneurs are individuals who establish businesses to serve communities in one way or another, for example, a hair salon or a coffee shop. Although they aren’t risk-averse, their businesses aren’t immune to business risks. 

Because each business is unique, it faces special risks. For example, it might rely on computers for efficient functioning. What would happen to your business if a power surge damaged your computers?  Depending on your type of small business, Dialdirect recommends one or more of the following types of business insurance:

• Commercial insurance

• Professional liability

• Property insurance

• Workers compensation (if you have employees)

• Commercial auto insurance (whether you use your car for business work or have a company vehicle)

• Business interruption insurance

• Office insurance, even if you work from home

Business insurance needed for professionals

Professionals, such as lawyers, accountants, pharmacists and investment bankers, feature in diverse economic sectors. A professional is an individual educated and skilled to perform a certain profession for a living. Professionals are often required to have an official certification or licence to operate independently. Professionals face various risks in their day-to-day functions. For instance, a lawyer has to attend court cases to represent clients, and this might require travelling in a car. What if one day such a lawyer is involved in a car accident while driving their personal vehicle? A car used for business functions must be insured with commercial vehicle insurance, not personal use cover. 

Dialdirect recommends Professional Business Insurance as well as some of the following types of insurance:

• Public liability insurance

• Commercial vehicle insurance

• Errors and omissions insurance

• Commercial insurance

• Office insurance

• Business interruption insurance

Business insurance for tradesmen

A tradesman is an artisan skilled in a specific trade, such as plumbing or electrical installations. Tradesmen, like plumbers, electricians, welders and carpenters, are crucial in many areas, including the commercial construction industry. These individuals may also be hired by homeowners for renovations and repair work. Many areas of their jobs are risky. For example, wrongly-installed electrical wiring could result in a short circuit that sets a house on fire. One of the major risks for tradesmen is doing work that doesn’t satisfy clients. Some of these clients may seek remedies, including suing a business for damages. If such an event were to happen to you, could you afford the cost that comes with it?

Although tradesmen insurance isn’t mandatory, it could save your business financially, and the livelihood of your employees. At a minimum, every tradesman's insurance should cover the following:

• Public liability

• Tools and toolboxes

• Commercial vehicle insurance

• Business interruption insurance

Business insurance for B&B and guesthouse owners

Do you run a bed & breakfast (B&B) or a guesthouse? If you do, you might be held liable if your guest suffers an injury while on your property.  As a B&B or guesthouse owner, you’re exposed to various risks that could lead to claims against your business. For example, imagine a guest slipped and fell in the bathroom? The easiest way to protect yourself from possible lawsuits is to obtain business insurance for B&Bs and guesthouses. It’s crucial to take the right insurance — one that caters for the special risks faced specifically by this industry. 

The most important perils to cover against in your B&B and guesthouse insurance are:

• Public liability

• Business interruptions to cover for loss of revenue

• Employee liability

• Property damage

• Commercial vehicle liability

• Loss of guesthouse or B&B room contents

The appropriate cover will depend on the needs of your B&B or guesthouse. When you have this type of insurance, you can focus on operating your business successfully, rather than worrying about how you might have to deal with lawsuits or cover damages.

Specialised business insurance

Business insurance doesn’t only cater for the risks mentioned above, but can also be tailored to a sector’s unique risks. For instance, a fitness centre faces a completely different set of risks from an aircraft company. For this reason, different industries require unique and specialised insurance. Dialdirect understands your business may need speciality insurance and offers cover specifically tailored to industries such as: 

• Engineering, construction and aviation 

• Medical and dental practices

• Agriculture

• Heavy commercial and manufacturing

• Body corporate and sectional title

• Educational institutions

• Veterinarian and wildlife organisations

As your business grows, you want certainty that your assets will be protected  — which is an excellent reason to consider taking specialised insurance.

Get a business insurance quote from Dialdirect

To gain a better understanding of the type of business insurance your need, Dialdirect recommends speaking with a trained insurance broker who will outline the risks associated with your job or industry.  Get a business insurance quote today from Dialdirect and protect yourself from risk, or contact us to set up an appointment with a consultant. 

 Sources:

[1] IFC: The unseen sector: a report on the MSME opportunity in SA 

Investopedia: errors & omissions insurance

Moonstone: ombudsman clarifies differences between private, business and commercial insurance

Business SA: Hotels and B&B’s 

Disclaimer: Dialdirect Insurance is a licensed non-life insurer and financial services provider. Terms and Conditions online.