Small business owners in Kenya need to be smart and strict in their financial dealings in order to maximize profits while limiting their expenses. For small enterprises to maintain profitability and boost growth, the owners have to pay attention to business aspects such as cash flow management, inventory, vendor relations, and customer service.
Business Insurance is vital to SME (Small and Medium Enterprises) owners, as they are more exposed to risk compared to larger corporate entities.
Many entrepreneurs rely on their personal insurance policies to cover their businesses. This is very popular among entrepreneurs who operate their businesses in their homes. However, this type of insurance can pose a serious risk to their enterprises. When it comes to making claims and receiving compensation, you may find yourself under-insured or not insured at all.
Types of Insurance Policies for SMEs
There are a variety of insurance policies intended for SMEs in the country that also offer coverage of assets and liabilities. When you are getting a business insurance policy for your SME make sure it has the following components:
Professional liability insurance: This policy protects the business against errors, negligence, and malpractices in service provision to the customers. It is also termed as errors and omissions insurance. It is commonly applicable in professional companies such as law firms, auditors, and consultants. It is not a uniform policy but can be customized depending on the insured’s industry.
Product liability insurance: If a business is selling products in the open markets, this type of insurance is absolutely necessary. No matter how careful they are in ensuring their products are safe, they can still be sued for damages caused by a single product. The product liability policy covers damages caused by defective products from your firm.
Property insurance: This type of policy is for small enterprises that own or lease a business premise. The insurance plan covers inventory, office equipment, furniture and personal items against the occurrence of theft, fire or weather calamity.
Business interruption insurance: It is also referred to as fire consequential loss, the policy compensates a business a portion of the income lost in the event of a disaster. The disaster can be a fire, storm or even hardware issues. This type of insurance is common for firms that have physical locations.
Work Injury Benefit Act (WIBA) insurance: When a business is set up and the first workers are hired, the owners should get this policy. This covers employees who are injured as a result of work-related activities. In addition, it compensates the workers with a part of their lost wages and meets rehabilitation expenses.
Health insurance: This policy provides health coverage for you and your workers up to a certain limit. It enables them in the event of an illness to have access to inpatient and outpatient services.
A business insurance policy for your SME is definitely a worthy investment. When you contact your insurance representative and inquire into what types of insurance policies that are available for your business and their related costs, bear the above components in mind.
Once you find the perfect plan, do not hesitate to apply them to your business. This way you can avoid financial losses. The success of your business depends on the contingencies you have placed to protect against loss.