It is often said that it is very difficult for an entrepreneur to do business in South Africa today. Not only are there very tough market conditions to contend with, but low barriers of entry, cheap imitations, authority interference, and economic slowdown - just some of the factors that a business owner must deal with in trying to grow his or her business.

And once a business owner successfully manages to overcome all stumbling blocks and grow a healthy business, he or she should also be aware of other risks that could affect the business - namely the risk of losing it all through an outside influence like a fire, theft or storm.

You must therefore also make sure that you protect those assets effectively against any damage or harm that may occur. This is where the short-term insurance industry plays its role.

It is important to note that each business will be exposed to specific risks that are of high probability in that industry and that each individual business should be assessed on its own. These typical risks must be evaluated, the likelihood of it occurring weighted and specific steps taken to minimize it. The risks of a high probability should then be insured against.

When looking at the prospect of a loss against your business, it is important to distinguish between the "possibility" and "probability" (likelihood) of a specific risk occurring. It would, for example, be too costly and impractical to insure against all possible risks. This is why we must make sure we understand the likelihood of a given event occurring and then evaluate whether we should be insuring against it. The object should be to avoid receiving a nasty surprise when a specific claim needs to be instituted!

The main risks that could affect a business, can generically be classified as follows:

1.	Insuring your total property and contents against fire, storm damage, earthquake, explosions, and/or collision.
2.	Insuring against the business interruption taking place following any insured event. A landlord, for example, would need to insure not only against fire, but also for loss of rent that may have to be carried as the result of a fire. It is therefore important to insure yourself against the fact that your gross income will be affected by not being able to carry on your trade.
3.	Insuring against theft and/or burglary.
4.	Insuring the money that you have on premises against specific losses and theft.
5.	Making sure that you cover the glass outside and inside your business.
6.	Making sure that you have items that you carry outside the shop covered against all risks.
7.	Insuring your motorcars and/or other transport means against damage. This is similar to how you would insure your private vehicle.
8.	Insuring any goods that you may have to deliver or receive while it is in transit.
9.	Making sure that you have all your electronic equipment covered against any event that could affect it.
10.	There are other various smaller sections that one can look at for example public liability, malicious damage, employers liability, your personal accident section for your employees, as well as a fidelity section.

When evaluating the insurance applicable to your business, keep the following tips in mind:

1.	Make sure that you use a broker that is knowledgeable and experienced in dealing with business insurance. It is a specific division of short-term insurance that requires expert knowledge. Ask your broker to prove his or her experience or knowledge in this regard.
2.	Go through each section of you business policy and let your broker explain everything to you. Make sure that you understand each section and evaluate whether it is applicable to your business.
3.	Make sure that you understand for which risks your are not covered. It may be that in developing your business, some of these sections covering those risks, could be added to your policy at a later stage.
4.	Evaluate the likelihood of a specific risk actually occurring. Weigh it up against the premium payable on that specific insurance and make an informed decision about your policy.
5.	Put measures in place to minimize specific risks at your business. This could lead to two positive outcomes, namely that you need not insure against low risk events that you have take precautions against, and/or your insurer will give you discount on your premiums to the fact that you have taken certain steps.
6.	Discuss all aspect of your business with the broker. Point out everything that he or she needs to know to be able to assess the risks involved. This openness will allow the insurance company to give you very attractive rates as they now have all details concerning your efforts to minimize your risks. Please also follow any advice that the insurer may give regarding the way that you are managing the risks.
7.	Make sure that you have at least a yearly evaluation of your business policy. Sit down with your broker and make sure that you go through the policy, the values, the risks involved as well as the rate that you are being charged by the insurer. If you have had a good claims record with the insurer for the past year, try and negotiate lower rates with the insurer for the coming year.

These are certain pitfalls that you need to watch out for when assessing your business policy:

1.	Make sure that you have all your contents, buildings as well as electronic equipment listed at its replacement value. Also make sure that you have these values regularly updated, as the average clause will be applicable on a claim under those sections.
2.	Landlords at shopping malls and office buildings normally place the risk for replacing any glass or shop fronts with the actual business leasing from them. Please scrutinize your specific lease agreement and make sure that your glass and shop fronts are adequately covered.
3.	Make sure that you understand the risks involved in the specific building that you are trading in or have your business. It could be that other shops open up in the same building which would dramatically increase your risk - for example, a fast-food restaurant opening next door to a printing business - a fire could mean the end for you! You need to take this up with the landlord and/or make provision in your insurance for the higher risk now involved.
4.	Make sure that you understand all the exemptions on your policy and that you have measures in place to counter-balance it.
5.	Make sure that you comply with all the requirements of the policy whilst busy with your business and/or trade. For example, it could be asked of you to bank your money every single day in order for you to have a certain cover regarding your money section. If you do not adhere to the banking, and you are robbed, your claim might be limited or rejected.
6.	Finally, make sure that your alarm and/or other security measures are in full working order and set whenever you lock up for the night.

It is imperative that you make sure that you have a business policy covering all your assets and that it is applicable to the specific risks facing your business. The only way to achieve this is to sit down with your broker, discuss the various aspects as pointed out in this article and renegotiate on the different aspects as well as rates of your policy.

You have worked hard to build up a business -make sure that it does not get destroyed in a single event!

Inus is an Executive Director at Snyman van der Vyver. Visit Snyman van der Vyver's website at www.svdv.co.za.

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