Phillipa Wild, head of commercial underwriting at Santam

As we begin to emerge from the pandemic, business owners are finding themselves having to adjust to a very different business environment. There is a cascade of complex new risks that entrepreneurs must contend with if they wish to successfully steer their business into the future. In addition to that, many businesses must still contend with many of the same risks that existed before the pandemic started.

Santam head of commercial underwriting Philippa Wild says, “There are so many challenges for business owners right now, including stressed staff and stretched cash flow. Both technologically and systemically, this has resulted in significant changes in our behaviour and has had a profound impact on both our clients and the insurance industry. It is imperative that businesses keep their policies up to date and have adequate risk mitigation policies in place.”

Wild believes the following advice will help keep your business protected in these uncertain times:

The risk management practices every business should have

No matter what type of business you own it is always important to consider what could impact your business detrimentally. From here it is important to develop risk management and safety protocols to help limit the impact and make sure you have adequate and appropriate insurance cover in place. Every business is different but as a rule, maintenance, good digital hygiene (having strong password policies and robust digital safety protocols in place) and strong fire safety protocols are a must.

What to consider:

The pandemic has increased awareness around the need for business owners to review their policies more frequently and keep their intermediaries abreast of any changes in circumstances. While most businesses have tended to renew and review their policies every 12 months, the pace with which things have changed in the past 24 months has made it clear that a more regular review of policies is paramount.  

Wild says, “A large part of any business owner’s risk management function is to disclose all pertinent changes to their intermediary. When they do this, it opens the door for the intermediary to appropriately notify the insurer and thus avoid a situation where there is a cover shortfall.”

The most common business risks:

Based on the number of claims it receives, Wild has identified the following as some of the most common business risks that an organisation will face across a variety of industries:

• Fires are considered the number one risk to businesses. In the current climate, one large fire could be the catalyst that closes a struggling business permanently. All it takes is a simple lapse in fire safety procedure. For example, if a generator is not maintained, its failure could cause the automatic sprinkler system to fail, which in turn may end up resulting in problems containing the fire.
• Cybercrime costs South Africa R2,2 billion per year. It can cost small businesses anywhere between R50 000 and R250 000, if not more, to recover from cyberattacks. Any business that uses some type of digital technology is vulnerable to such attacks. This is why it is important to implement good cyber risk management practices and appropriate cyber insurance cover, often available as a package in the market. This will help protect your business against losses such as business interruption, ransomware, and forensic costs, caused by a cyber malware attack. 
• The accelerating rate of change refers to how quickly things can change. Business owners need to evaluate the impact of new and emerging risks, like cybercrime, and how their own business��s risk profile has changed. For example, with more employees working from home (with company assets being transported and no longer only kept securely on site) there is an increased risk of cybercrime, loss, and damage to company equipment. Then there is also the change in occupancy now experienced at your premises now that fewer employees are on the premises less often.
• Business processes and reliance on business partners: Any risk management strategy needs to consider how your business relies on business partners and supply chains. If their risk environment is changing, are they adequately protected, and risk managed? Business owners should have contingency plans in place which they can discuss with their intermediaries and purchase insurance where necessary.