Millions of foreign tourists hit SA’s shores every year, many of which descend in December for the festive season. But more people mean there is more at stake for businesses. With this in mind, Santam offers some top tips for companies on how to mitigate peak-season risks.
Shehnaz Somers, Head of Commercial Underwriting at Santam, says: “Fires and special perils, deterioration of stock, business interruption, workplace accidents and equipment breakdowns are some of the big risks, but our stats show that the most common commercial insurance claims are for vehicle collisions. Past trends indicate that our road accident claims generally increase during the December holidays.”
It is therefore imperative that businesses have adequate insurance for expensive assets like a vehicle or building. It’s not just to cover you for the cost of repairing or replacing the asset, but also the resulting expenses when the asset is not fully operational for a potentially long period.
Here are some of the biggest risks and what businesses can do to mitigate them:
- Liability: If someone trips and breaks an ankle at your guesthouse, or ten people get food poisoning at your restaurant, it’s not just that you could be held liable – the reputation of your business could also be at stake. Therefore, make sure that your liability cover is adequate and up to date. Also take smart steps to proactively reduce risk, for example: Put up a safety sign warning people of upcoming steps in your B & B, or, if you own a restaurant, list every ingredient of each dish to make patrons aware of certain allergens.
- Business interruption: The impact of business interruption is consistently underestimated, often to the detriment of the business. If, for example, an electrical fault causes a fire, or the elevator breaks, your business could be rendered non-operational during the busiest time of the year. Think of how much profit you’d potentially miss out on. Make sure you have adequate business interruption cover in place, and choose the correct extensions for the type of business you run.
- Equipment breakdown: For some businesses, the holiday season is often their busiest, putting a strain on certain equipment that makes them more at risk of failure. Ensure that essential equipment is serviced well in advance and well-maintained, and have a plan B in place, like a backup machine on standby. Also make sure your insurance includes machinery breakdown cover.
- Workplace accidents: In the festive season with its long hours, constant coming and going of people and crazy deadlines, workplace accidents often increase. Avoid these by regularly reinforcing safety protocols with your team. Remind them not to cut corners, and get new employees quickly up to speed with all business processes that help injury avoidance. Also check that you have enough business interruption insurance to help protect your profit should an accident cause the closing of your doors.
- Bad weather: South Africa had more than its fair share of fires, floods and hailstorms in recent years. It’s therefore imperative to know what kind of conditions your business is most exposed to, and then plan accordingly, for example: If you know there’s a risk of rain and hail, clean the gutters, replace broken roof tiles, and store goods that could experience water damage on pallets. Also try to plan orders and deliveries according to the weather forecast, especially if heavy rain is predicted.
To prevent fire risks, check all your electronics and electrical installations, service your firefighting equipment, and remove any waste from the premises.
- Cybercrime: Phishing seems to increase over the festive season, so ensure your team is hypervigilant. Hold regular info sessions so that your employees are well-informed about the latest scams, especially spear phishing – highly targeted and personalised emails that usually request the instant transfer of company funds.
As cybercrime scams get more sophisticated, it’s increasingly hard to spot some of them. Keep a close eye on all transactions on the company credit card, and be sure to ask staff never to click a link in any email. Also make sure you have adequate cybercrime insurance in place.