Getting started with business insurance
Business Insurance is not very popular amongst businesses in Nigeria. According to this article in the Guardian, Insurance only accounts for 0.3% of Nigeria’s Gross Domestic Product. Even while the insurance industry is valued at 520.1 trillion naira, the total penetration of insurance is 0.5%, This Day reports. These numbers are pretty abysmal in light of the rising potential risks businesses face in Nigeria.
Most SMEs in Nigeria actively avoid insurance due to the perception of cost. These business owners feel that insurance would cost them more in the long run. SMEs have long contributed massively to the GDPs of countries, up to 40% in Nigeria, according to PwC, even with the significant number of risks SMEs face.
Lekan Oyinlade, the GMD of Old Mutual Assurance, opines that ‘purchasing insurance covers serves as the best way entrepreneurs can be shielded from losses.’ We do not have to look too far to agree with him. Events of the October 2020 protests in Lagos have added a lot of context to the issue. Businesses across every level have seen the need for some sort of coverage.
Types of Business Insurance
Business insurance has become more prominent than it used to be. National laws often regulate insurance, so the types of business insurance available to entrepreneurs differ from region to region. We would classify business insurance into four major categories.
Liability Coverage
This classification of insurance protects the business against bad things that happen to people from a business’s activities. Successful companies often encounter many people in their value chain, and accidents happen. Liability coverage describes a package of insurance that tackles any liabilities.
- General Liability
- Medical Expense Liability
- Product Liability
- Employee Practices Liability
- Professional Liability
- Cyber Liability
Property Coverage
Another aspect of business insurance is property coverage which protects the physical assets your business has; offices, equipment, data, documents, and even money. Natural elements, external agents, and malicious actors could damage your business’s non-human assets, so it is wise to protect your indispensable assets with insurance. Under Property coverage, we can find;
- Building Coverage
- Business Personal Property Coverage
- Specialized Equipment Coverage
- Data Compromise Coverage
- Money & Securities Coverage
- Business Income Coverage
- Equipment Coverage
- Forgery and Alteration Coverage
Employee Benefits
Your staff are your most valuable asset in driving your business through sustainable growth, and it is important that they are kept motivated. In Nigeria, the law states that employers with 3 or more staff are mandated to take up Group Life insurance for their staff, that pays out a sum assured to the family of the staff in the event of something adverse. Group personal accident and Group health insurance are also important benefits that employees deserve and can essentially boost productivity.
Workers Compensation
Your business is exposed to risks associated with labour. Disagreements between companies and employees are not strange. A series of events may lead to contract breaches, or something awful could happen to the company or worker that could cause harm. Worker’s Compensation coverage handles incidents where a worker would need the payment for injuries or damages. This category of insurance is usually tariff rated.
Auto-insurance
Transportation is critical to any organization; thus, auto insurance is one of the necessary insurance policies businesses undertake. Most companies and firms possess a fleet of cars that aid in moving workers from place to place. Instead of buying insurance for each car, businesses could buy one auto insurance for all of their vehicles as a package deal.
However, when arriving at his workplace he realized that his staff did not feel the same way. He strived to build up a positive atmosphere, yet he found that something essential was missing. He understood that his team did not feel the security for them or their family as he did, and this made them feel unmotivated, which in turn, also affected him.
By having a Group Life and Accident Insurance as a part of your employee benefits package, you will create and enable a secure environment for your employees, which in turn will boost their overall productivity and performance at their workplace.
What is not covered by goods in transit insurance?
But, if we have said that there is “all-risk” insurance, how is it possible that there are circumstances in which our insurance does not cover us? Usually, this happens because the party that contracted the insurance acts maliciously for the insurance to pass on the amount, or one of the parties acts in such a way that the correct measures are not taken. A clear example can be a drunk driver who may spoil our merchandise.
In legal terms, good faith must prevail in a relationship between policyholders. Otherwise, our insurance may not cover possible damages or losses. Some of the situations that GIT will not cover are:
- Expenses incurred for the delay.
- Manifest vice.
- Inadequate packing.
- Negligent conduct of the carrier.
- Bad faith or fraudulent conduct by the insured.
Getting insurance for your business
Now that you have a good overview of the available insurance products businesses can get, it is time to figure out what kind of insurance your business needs. You can start by contacting YOA Insurance Brokers to get insurance befitting your business
Contact YOA Insurance Brokers
YOA Insurance Brokers offers free advice on insurance coverage, risk engineering, and claims processing services both locally and abroad. If you have any doubts about GIT, do not hesitate to ask us here info@yoainsurance.com.