Article provided by King Price Insurance
Natural disaster? Those only happen in other countries. That’s a common perception among millions of South Africans – but with natural catastrophes on the rise across the world, you could be making a costly mistake if you don’t take steps to protect yourself and your business.
According to insurance broker Aon, insured losses from natural disasters reached $42 billion globally in the first six months of 2021 alone, and natural disasters in South Africa are becoming increasingly common, at a staggering cost to the economy and the insurance industry.
Damage caused by fires, floods, storms, hail, lightning and earthquakes can deal a devastating blow to the financial wellbeing of your SME. And, many small business owners only discover that they are under-insured after their business premises are damaged. As a general rule, your buildings (if you own the premises where your business operates) should be insured for what it’ll cost to rebuild from the foundations up. This includes unseen expenses like fire brigade costs, demolishing old structures and site clearing, as well as alternative premises and increases in the cost of working in the interim.
As a reason for not insuring their premises correctly, some business owners cite doubt as to the ability of insurers to meet massive claims caused by natural catastrophes, which can run into hundreds of millions of Rands per event. However, when it comes to paying claims, there’s no need for concern. In South Africa, the industry regulator requires all insurers to maintain adequate surplus funds for potential claims because of insurers’ exposure to large catastrophe events, including hail and earthquake. If you lose your business premises, your machinery and fleet of vehicles, your office contents and electronic equipment, and you’ve dotted the Is and crossed the Ts on your insurance policy, you’ll be paid out.