The beginning of the year is the perfect opportunity to give your business insurance portfolio a good review and clean-up. When you’re in the thick of running your business, and tending to day-to-day work responsibilities, it’s easy to leave aspects such as insurance simply to ‘tick’ over, but that could leave you compromised as your business evolves and its needs and exposures change.
Here are 10 important considerations to help get your insurance cover into top shape to take on any challenge that may happen along its path during 2017:
Get cyber savvy
Cybercrime is a very real threat to any business or institution, regardless of size or nature of business. If your business has a network, an internet connection and holds sensitive or personally identifiable data, then your business is at risk. Talk to your professional broker about how to protect your business against cyber hacks.
Whether you run a handful of cars or a fleet network, make sure your vehicle insurance is fit for purpose with sufficient liability cover. From an asset replacement perspective, your business vehicles should be insured at no less than retail value, which is what a car dealer would sell it for taking into consideration age, mileage and condition. Don’t forget to add extras such as tracking systems, tow bars and so on. The inclusion of car hire can also be beneficial.
If your business premises burned down, your assets cover will take care of replacing the lost items, but what happens if you are unable to trade for weeks, even months and your income stops coming in as a result? Business interruption insurance is vitally important to tide your business over in terms of lost income as a result of physical damage, until your business is back to operating as usual. Talk to your broker about this very important cover.
Directors and officers insurance
The main purpose of a D&O policy is to offer financial protection for company executives in addition to providing legal coverage in the event of a claim. The cover that a D&O liability insurance policy provides is an absolute necessity when it comes to the protection of the personal interests of directors, officers and other employees that are charged with supervisory and managerial responsibilities, and who can be held liable for wrongful acts which may occur in their day to day management activities.
White collar fraud
In the current tough economic environment, fraudsters are becoming ever more creative and syndicates are also at play, which means companies are facing ever increasing risk from white collar crimes in areas such as credit payments, EFT transfers, debtors, petty cash abuse, cash theft, international transfers, payroll fraud (ghost employees) and stock theft. The fundamental solution is a commercial crime framework, incorporating indemnity for losses resulting from employee dishonesty, forgery or alternation, fraudulent transfer instructions and third party computer crime. Talk to your professional Aon broker to tailor covers according to the potential of fraud exposures in your business.
Check your sums insured
Check that the sums insured on your building and contents are sufficient. Have you made alterations to the building and bought new assets such as laptops or machinery that adds to the value you need under the sum insured? Don’t forget to factor in the impact of inflation and the falling Rand exchange rate. Businesses that procure equipment or supplies from international markets are at risk of significant losses if you have not reviewed the impact of the falling Rand on the insured value of property and assets.
Despite the risk to business continuity, financial security and brand reputation, many business owners remain indifferent to the domino effect that a fire poses to their business sustainability. Make sure you have enough cover to protect you in a worst case scenario in terms of contents, building, business interruption and any liability that may arise due to injuries or loss of life.
Insurance for keys and locks
Advances in technology and security have seen us graduate from standard metal keys to smarter devices, many complete with transponders and programmed microchips. Loss or theft of such keys can cost a lot more than your business bargained for. Check to see whether the sums allowed for replacement of locks and keys is sufficient.
Trade credit insurance indemnifies a seller against losses from non-payment of trade debt arising from insolvency of or delayed/slow payment by a buyer.
It offers protection of accounts receivables against non-payment due to slow pay, insolvency or foreign non-transfer risk. Coverage is designed to prevent disruptive losses, reduce risk of key account concentration levels, and provide risk transfer of bad debt issues. With trade credit in place, companies can also enhance their bank financing in terms of improving the lending relationship, enhance their balance sheet and gain access to more capital at reduced rates.
Talent retention remains a key objective for South African companies and the best approach is to increase the attractiveness of a position by implementing a comprehensive compensation and benefits solution that is properly communicated to the employee. The support of a professional consultant or broker with experience across the spectrum of benefits will prove invaluable in formalising the benefits program for your business and delivering a structured benefits communications program suited to various levels of employees.
Regardless of size or status, there is no one size fits all approach to business risk insurance. It all depends on the size of the company, nature of its business and its unique levels of exposure. Consulting with a professional Aon risk advisor is an invaluable exercise in protecting your business, reputation, clients, colleagues and bottom line.