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  • Writer's pictureMy Finance Partner

Business Insurance

As a business owner one of the crucial areas to look at when managing expenses is insurance. Insurance serves as a protective measure for your business and its purpose is to put you in the same position you were in before the event happened. It is not there to enrich you.

It is essential to assess your insurance coverage to ensure that the cover that is in place is adequate to cover the asset(s) it is designed to protect. Very importantly, the amount of cover must be the VAT inclusive amount. Something to remember is that being underinsured can result in receiving a lower payout in the event of a claim, which may significantly impact your business's financial stability.

When examining insurance options, consider the following types of insurance for your business:

  1. Asset Insurance: Make sure all your business assets are adequately covered for their correct value. This includes property, equipment, vehicles, and any other valuable assets. In the case of an unforeseen event, such as theft, fire, or natural disasters, having the right coverage at the correct value can help you recover the value of your assets.

  2. Stock and Goods in Transit Cover: If your business involves transporting goods, ensure that your insurance policy covers the value of the items being transported. Whether it's goods in the back of a truck or stored in a warehouse, having appropriate coverage for your stock is crucial. It is important to review this insurance regularly as your stock value could increase as the business increases and you need to ensure your stock cover is sufficient.

  3. Buy and Sell Insurance: For businesses with multiple partners, it is wise to consider buy and sell insurance. This type of insurance provides a financial payout to help partners buy each other out in the event of a partner's death or disability. It is important to note that this is a funding mechanism and it is vital still have a contract in place that will force the sale of the shares in the event that a partner passes away or is disabled.

  4. Key Management Insurance: Key management insurance is taken out by the company to provide funds in case something happens to key personnel who play vital roles in the business. The purpose of this insurance is to provide money for the business should something happen to them that could have an impact on the trading of the business e.g. lower sales due to a key sales person passing away.

  5. Machinery Breakdown Insurance is used should your business rely heavily on machinery or equipment and very relevant when a business is involved in manufacturing. This coverage helps cover the costs of repair or replacement in case of mechanical failures, minimizing the impact on your operations.

  6. Business Interruption Insurance: Business interruption insurance provides coverage for lost income and ongoing expenses when your business is temporarily unable to operate due to an insured event, such as a fire or natural disaster. It can help you stay afloat during the recovery period.

  7. Staff Benefits: Taking care of your employees is essential. Pension and provident fund options can help your employees plan for their retirement. This and medical aid can provide a valuable benefits package for staff.

Should you need any further advice on business insurance, contact My Finance Partner today!


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