While there has been a rapid growth in the number of small or medium-sized businesses in Botswana over the last few years, some of these will go out of business due to unforeseen circumstances that can be avoided.
A significant amount of new business owners are unaware or fail to take seriously all the unexpected risks that owning their own business presents. There is a growing trend towards entrepreneurship as people in large companies face a slower career path and opportunities of funding are presented by Government & Financial institutions.
It is therefore imperative for the health of the Botswana economy that these businesses succeed. Unfortunately, while many of these people have great business ideas, they often come unstuck due to poor financial and risk management practices. One of the keys to running a successful enterprise is ensuring you have the necessary business insurances in place. When starting a new business, cash flow is always an issue. Unfortunately, in an effort to keep costs down, many small business owners choose to forego insurance cover, believing that they will just be extra cautious about providing customers with a safe environment, or in the way they treat their equipment and property. BIC strongly discourages any new business owners from taking this approach as it is simply impossible to avoid all pitfalls all the time.
The following types of insurance are must-haves when it comes to cover for small businesses:
- Workmen's compensation – This is a legal liability to employees in terms of the Worker's Compensation Act of Botswana arising out of and in the course of their employment. This policy covers your employee as it compensates them if they are injured or suffer a scheduled disease which results in them being disabled or death whilst engaged in the work that you have employed them to do.
- Fire cover to cover a potentially catastrophic loss such as stock or machinery due to a fire or storm.
- Business Interruption cover to ensure that all operating costs including wages can be paid in the event of a catastrophic loss. The business owner would need to select the indemnity period, with options from 6 - 12 months, which is the maximum time expected to get the business back up and running at the level it was before the loss occurred.
- Theft cover. This covers the business owner's stock and equipment.
- Public liability cover to cover loss or damage to third party's / third party property while on a business owner's premises. This cover can also include products liability cover (i.e. if the business manufactures goods), defective workmanship cover (i.e. if the business repairs goods) as well as food poisoning (i.e. if the business produces or supplies food and beverages).
- Motor cover. A small business owner can ill afford not to insure their tools of the trade such as vehicles - especially if the business relies on sales representatives or transportation and delivery of goods. It is important to ensure that the description of use for this insurance is correct and that the cover taken is as comprehensive as possible as there are various cover options available. Car hire following a loss under this cover is also critical to ensure minimal interruption once the vehicle is being repaired or the claim is being settled.
Visit BIC or one of our authorized agents or brokers to find out how your business can benefit from the covers that are mentioned above and many others.
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