How to secure your investments through insurance policies

Disaster or mishap is never planned, but it happens and when it occurs, it brings huge financial obligations to replace the lost assets.

For those with a large financial vault, they can quickly replace it but for small businesses or investments, it’s always difficult and in most cases, such disaster may lead to the end of such asset.

Imagine someone who struggled for business capital, set up his shop, equipped it, stocked the shops, with, maybe Electronics for sale, only for the shop to be burned down by the fire. Apart from the trauma, the chance to start all over again is slim.

For instance, during the last #EndSARS protests in the country, most government offices, banks, shopping malls, media houses, toll plazas, and private offices, including Small and Medium Enterprises(SMEs) were set on fire or vandalised by hoodlums.

The estimated cost of destruction has been put above N1 trillion.

One year after, a lot of businesses are yet to come back because they are facing difficulties raising fresh capital to restart the businesses. However, those who insured their businesses were able to get claims from their insurance companies and have since moved on.

To this end, entrepreneurs must be prepared for an event such as this and hence, must protect their businesses through various relevant insurance schemes. Here,

Insurance, by its nature, puts you back in a financial position you were before the risk occurred. So, in essence, your insurer is responsible for whatever happens to your shop provided it’s adequately insured.

Need For These Insurances

Checks have shown that some of these policies have as low as an N10,000 annual premium that can give the policyholders up to N500,000 to N1 million claims. So, it’s an investment with no regret.

The head of bancassurance and distribution, Old Mutual Nigeria, Dumebi Okonkwo, said, for SMEs, risk assessment is very critical to mitigating financial loss such as this, saying, insurance companies have different insurance products to insure SMEs in the country.

To sustain and securitise one’s business, she said, the owner must insure his equipment, motor vehicles, stock and human capital, saying, fire insurance, burglary insurance, motor insurance, group life insurance, among other products, are insurance solutions to protect entrepreneurs and their businesses.

Speaking on deepening insurance awareness and education, the Chairman of the Nigerian Insurers Association (NIA), Mr Ganiyu Musa, urged Nigerians, especially, entrepreneurs to protect their assets and lives through insurance, such that, if there is a risk, it will not outweigh them.Musa, who is also the Group Managing Director, of Cornerstone Insurance Plc, promised that insurance operators will always pay genuine claims just as the industry has improved over time in the area of claims payment.

“The association will continue to emphasise the need for insurance companies to pay all genuine insurance claims and will not hesitate to sanction erring member companies,” he pointed out.

To this end, the insurance industry paid over N240billion claims in 2020 while it paid about N280 billion in the 2021 financial year.

In a communique issued at the end of the Stakeholders meeting, On implementation Of Occupiers Liability insurance in Lagos, it was concluded that “there had over the years been, numerous accidents and incidents such as natural disasters, building collapses, fires, explosions that have resulted in injuries, permanent disabilities, loss of lives and property.

“To protect Nigerians and their businesses from vagaries in the event of the unfortunate incident leading to injury, property damage or death. The Federal Government through various Acts of parliament have over the years promulgated laws making seven insurance policies compulsory across the federation.

“However, due to several factors, some of these compulsory insurance laws have not been fully implemented. As such when dangerous occurrences and disasters happen, the citizenry looks up to the government for compensation, but insurance will relieve businesses and the government of this burden.”

Fire and Risk Insurance Plan

Fire and Risk Insurance is a vital insurance plan for SMEs in Nigeria. It covers your business against, earthquakes, fire outbreaks, tsunami, floods, social unrest, and intentionally inflicted damages that may occur in the line of your business. Under this plan, your insurer will pay back all your losses, giving you the capital, you need to resuscitate your SME.

Professional Liability Insurance Plan

A professional Liability Insurance plan covers business owners from claims or legal liabilities from their clients. It protects professional SMEs business against laxity claims due to damage that results from mistakes or failure to perform. For instance, this insurance protects doctors, lawyers, and accountants, among other professions, against damages or claims brought by a client in a court of law within Nigeria. The policy also covers financial losses or legal costs.

Product Liability Insurance Plan

This type of insurance plan for SMEs in Nigeria protects their business from liabilities, claims or damages that may erupt from the use of its products. Product liability insurance is important, especially for SMEs in Nigeria that manufacture products for sale on the general market.

Business Interruption Insurance Plan

Natural disasters or bad government policies are the various issues facing SMEs. Small business usually goes through a financial crisis during these issues. A business interruption Insurance plan compensates this business for its lost income at such time. This policy applies to companies that require a physical location to do business, such as retail stores been demolished by the government because of ongoing construction throughout the state/paving new roads, and so on.

Commercial Property Insurance Plan

A commercial property insurance plan covers all business equipment, signage, inventory, and furniture in the event of a fire outbreak, or during a crisis.