Rendani Nevhulaudzi | Business risk management through insurance cover

This week I plan to tackle one of the most critical aspects of the business that many small business owners overlook, which is managing business risk. This is an important aspect of business that deal with likely threats or risks that might affect your business, and ultimately, its survival.

Many of you will remember that painful, challenging, and intense COVID-19 pandemic period of 2020 to 2021, which brought about a sudden economic slowdown, the sinking and permanent closure of many businesses since no one had predicted it would be followed by a hard lockdown, which effectively crippled business operations at a global scale. The combined circumstances, including stringent business operations regulations and bans in many other areas, not only claimed millions of human lives and livelihoods, but also sent multitudes of small and medium enterprises into a death spiral, literally pushing them over the cliff into the abyss, a point of no return.

Many of these small and medium enterprises, especially those surviving on minimal margins, who also were not yet able to set aside adequate sums of money into some reserves for better days and had zero cover to mitigate the closure of business operations are now confined in the annals of history.

Now I will not focus on all sectors of business risk, but mostly on Marketing or Digital Marketing Agency risk management, and how to cover yourself from some of these glaring risks that need to be mitigated. I will write according to my experience and how I covered my business for continuity and threat management.

Here are some of the risk management covers you ought to have when your business is beginning to draw revenue and growing:

• Business Lawyers (legal representation) - these guys will assist you to ensure you are legally compliant with statutory regulations of the country including any other legislation that affects your business. Now if you feel your budget is still minor to afford a law firm, you can use a route we took when we started, which is using monthly legal cover like FNB Law on Call Business Plan. They will assist you with civil disputes, labour issues, criminal cases arising and debt collection for a monthly fee. Lawyers are very important in a business, and you should always ensure you have legal cover or law firm assisting your business.
• Business Owner Cover - this one is very important once your business is up and running and incurring debts for growth, you ought to protect the firm and this cover will assist to settle any surety debt that you as director have taken on behalf of your business in the event of the your death - this also protects other directors in the business if the event of your death to cover other costs of hiring and training someone to replace you as the director. This cover can be structured and tailored according to your business needs so ensure that you cover yourself as a business owner to mitigate continuity in the event of your death.
• Business Contents Cover - Once you have your office, you want to cover the content of your business - on this section, I learned the hard way - at one point in my life, all our business office assets were stolen, everything gone, from laptops to printers and by then we did not have cover for any of these items - this meant we had to dig into our revenues reserves to replace everything in the office and to continue deliver to our client. You must understand that clients do not care if you had a burglary, they have deadlines - so to ensure you are not like me long ago, get a cover for business assets in the event of theft or damage. I also learnt the hard way and have covered all our business belongings. 
• Public Liability Insurance - This is also a must have and covers the cost of compensation for: personal injuries. loss of or damage to property, especially if you are operating an office where there are physical engagements or face-to-face - in an event of an accident in your office, be it a contractor or employee, this insurance product will be triggered to cover the incident. While talking of this insurance product, you can also add custody and control of assets if you carry any client’s materials - this ensures in the event you lose the client items in transit (in the process of being delivered to them), they are also covered.  
• Comprehensive Vehicle / Asset Insurance - in the event that you plan to buy a car for your business, ensure that you take comprehensive business car insurance - make sure you clearly state if the business car will be driven by one person, or it is open to be driven by anyone with a license. It is very important that you mention this when signing the insurance cover because your insurance might decline your claim if you have not properly declared the custody and operation of the vehicle.

The above list is not exhaustive, however if you have the above covers, you are mostly well secured to mitigate your business from threats - there are many other covers that business owners take to protect themselves and the future of their business, take time to speak to a business financial consultant to assess your business risks and provide you all valid cover.

*This article was written by Rendani Nevhulaudzi, Managing Director, Joren Digital.