MSM Enterprises also need insurance for unforeseen events

By Johannes Hesekiel, Old Mutual Short-Term Insurance General Manager: Sales and Underwriting

Small companies experience various challenges in the constantly evolving business landscape of the present day. There are numerous uncertainties that arise during the journey, ranging from managing daily task to navigating the intricacies of market demands. Small business owners are most concerned about unforeseen incidents that could interrupt their operations and put their assets at risks. Short-term insurance serves as a safeguard, protecting assets and ensuring business operations continue smoothly.

Short-term insurance, also known as general insurance, shields businesses from possible financial losses. Temporary insurance plans usually last for a specific period, usually up to a year, and can be extended as required, unlike permanent insurance options such as life or disability insurance. Business owners can feel secure and protected financially with these plans, which cover immediate and tangible risk such as theft, property damage, liability, and business interruptions.

The resources owned by small business owners, such as property, equipment, and investments, are crucial for the success and functioning of their businesses. Theft, fire or flooding can cause serious financial consequences in a single event. Short-term insurance provides protection for commercial property against losses or damages, thereby mitigating potential risk. If a retail business owner is the victim of a break-in, he or she may be able to pay for the replacement of the stolen goods and repair the damage to the store, with short-term insurance cover. This protection ensures that business owners can quickly recover from setbacks without enduring significant financial damages.

Small business owners are also concerned about third party liability claims against their businesses, which is a significant problem. Sometimes accidents happen, leading to lawsuits that can result in financial compensation or large settlements. Public liability insurance and other types of temporary insurance provide protection for businesses against the cost of legal defence in cases where third parties claim property damage or bodily harm. For example, the owner of the restaurant could be responsible for injuries that happen to customers who slip and fall on a wet floor. Liability insurance shields the business’s financial resources by paying settlement costs and attorney fees. Because it helps keep the business operating while also providing liability coverage and asset protection, short-term insurance is essential for business continuity.

Another kind of short-term insurance is business interruption insurance. Business interruption insurance, a type of short-term coverage, is designed to compensate a company for its lost earnings in the event of a disaster such as a fire.

In short, short-term insurance offers small business owners a comprehensive safety net that safeguards their assets, lowers liability risks, and ensures business operations can continue smoothly during unexpected challenges. It is advisable that entrepreneurs should protect their businesses and effectively navigate the unpredictable nature of today’s business environment by familiarising themselves with the different options of short-term insurance and understanding how each one can benefit them.

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