Business Insurance for Close Corporations

Close Corporations or CCs are just like other businesses and in terms of their insurance needs there is not much difference. Business insurance is vital and this specially applies to new businesses.

In South Africa there are certain aspects such as theft, damaged goods, natural disasters such as flooding and these happenings are not always predictable.

Planning and investing in business insurance can sometimes mean the difference between a businesses succeed or failure.

The insurance needs for businesses are slightly different to the insurance of personal items, but the concept is the same. There are a number of companies that provide business insurance, but it is ultimately up to the owner of the business.

It is recommended that you get at least two or three quotes and then analyze the benefits and cover of each quote. Obviously the cost and monthly premiums will play a major role in your decision making.

The four basic components of a Business Insurance Policy are:

1.) Land and Buildings - Property

Whether you own the building that the business is running from or if you are renting the information needs to be included in the Business Insurance Policy. In some cases you might be required to insure the building that you are leasing if you are renting. The office equipment, machinery, computers, raw materials, stock etc can also be insured. Vehicles and larger, more expensive assets such as forklifts should also be insured.

2.) Liability

Most businesses will be dealing with the public and so there is a chance that injury and loss to others can be caused. Public liability insurance will normally cover the business for costs which are legally liable to pay which caused for example: illness, injury or death to someone or damage to property belonging to someone else. The cover will depend on the type of business insurance and the insurance company.

3.) People/Employees

Businesses with employees will require workers compensation insurance and you might also want to consider health or life insurance for employees.

4. Income:

Income is vital in business and if the income stream is stopped or affected the business can experience cash flow problems and even liquidation/closure. Business insurance policies that have Business interruption Insurance will normally be covered for the income lost due to certain interruptions. Again, the type of cover and the extent of the cover depends on the type of business insurance policy.

Business Insurance should be considered a necessity in most cases. Always analyze the insurance and the extent of the cover that you will be receiving. All businesses are different and that is why the type of insurance and the extent of the cover you require will be different to other businesses.

A tip when preparing to get business insurance is to have all the necessary information available such as budgets, projected income and expenses, number of employees, value of assets etc. This information is required so that the business insurance company will be able to create a tailored made insurance policy that covers your unique needs.