Risks of not insuring your business


One of the most commonly overlooked priorities when starting a business is having adequate insurance in place to cater for unforeseen risks.

Theunis Fourie, Head of Insurance Brokers at FNB says business owners who overlook having insurance in place face the risk of, worst-case scenario, liquidation, should the business face liabilities.

Fourie says when it comes to insuring a business, a one size fits all approach often doesn’t work as every business is different and faces unique risks. Therefore, it is essential to consult your broker to get proper advice on the best suitable cover for your business insurance needs.

He points out key insurance risks that every uninsured business faces: 

  • Complete shutdown – uninsured businesses face a higher risk of being shut down due to a variety of unforeseen events such as riots and liabilities.
  • Creditors – should the business shutdown for whatever reason, without having insurance in place, the owner would still be liable to creditors.
  • Personal income – if your business shuts down it can also affect your personal circumstances as you may be left with no personal income.
  • Salaries – should employees be impacted by business risks, insurance can be used to cover salaries for a specific period.
  • Theft – this is a common risk for all businesses, particularly retail businesses, which shouldn’t be overlooked.
  • Damage to property – this may result in the business losing assets and valuables due to fire or unforeseen events that may result in the property being damaged.
  • Key person insurance – if the survival of the business is dependent on its partners being available, it is essential to take out key person insurance which can provide cover following the death or disability of a key individual. 
  • Loss of profits  any financial mishap which may result in the loss of revenue places a risk on the survival of the business. Therefore, insurance such as business interruption cover can be used to protect the business against any loss of income and ensures business continuity.

“When starting a business, it is essential to seek professional guidance to structure an appropriate insurance solution for your business’ specific insurance needs and requirements.  This will enable you to make the best choices when it comes to protecting your assets and the security of your business,” concludes Fourie.

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