CRA Business Insurance Explored – South Africa
With millions of people around the globe working from home during the novel coronavirus (Covuid-19) pandemic, many organisations had to delve head-first into online working models, stress testing their effectiveness and adopting new working platforms.
With the realisation that many office staff are able to operate remotely with ease, more companies are embracing the idea of making this approach a more permanent scenario, in addition to engaging with remote suppliers around the globe in order to adopt a more agile workforce.
An example is Amazon advertising 3 000 virtual positions to South Africans to work remotely for the tech giant based in Washington.
According to Aon South Africa, insurance brokerage and risk advisors, while your business may now be based at home, the risks it faces are very much in the business realm.
There are a number of important aspects to consider from an insurance and risk perspective when working from home:
* Assets cover: The inventory of assets alone is normally vastly different between your standard furniture contained in a home to the specialised equipment used in your business. Think of the expensive equipment that a dietician, physiotherapist or architect may require versus that of your usual household items as an example. This becomes more complex if you are ordering and keeping stock for clients on your premises or specialised materials and instruments that are needed to perform your work – you need a commercial insurance policy that is geared for fire risk, damage or theft as well as the liability risks that a business could face.
* Business all risks cover: If you have company equipment at home such as a laptop, a printer or even an uninterrupted power supply (UPS), then check with your employer whether these items are covered under its business all risks cover.
* Motor insurance: There is a distinct difference between taking a weekend road trip or transporting friends to a rugby match and that of regularly driving to visit job sites or earning an extra income as an uber driver. Your personal car insurance will normally not respond to a claim when you are transporting people or goods for remuneration or using your vehicle to conduct your work activities.
* Liability Cover: For many professionals, there is often a blurring of lines between personal and business roles and this extends into insurance planning. It becomes especially important in a world where work environments are evolving, and more practitioners like dieticians, chiropractors, physiotherapists and psychologists set up home-based practices. While a liability claim may seem highly unlikely for a private practice, they can and do happen and typically spell financial ruin without insurance cover. Likewise, losing your stock, equipment and important IT assets such as laptops or servers can be a huge loss, not just financially, but reputationally too. This is why it is crucial to do a thorough needs analysis to ensure that your home-based business practice is covered for every possible scenario.
* Cyber risk: The Covid-19 induced shift to remote working has provided a golden opportunity for cybercriminals to target one of a business’ biggest cyber vulnerabilities – the workforce. Whilst the pandemic may have accelerated the pace of change for digital transformation initiatives and remote working enablement, businesses should ensure they review the relative cyber risk to their operations and understand that systems which may have been secure before, may now be vulnerable due to the change in operations.
* Goods in Transit and Stock stored offsite/at home: Whether you’re a tradesman or contractor transporting expensive tools and materials from your work site to client site, or a renewable energy specialist installing PV systems at homes or businesses, the protection of your valuable stock and customer orders while in transit against damage or loss due to an accident, theft or hijacking is critical to the sustainability of your business, your reputation and financial stability. If these goods are damaged or entirely written off during transit due to a vehicle accident, theft or hijacking, you could be left in a world of pain of having to replace the damaged goods at your own cost if not insured, not to mention the enormous reputational damage which could ensue if customers are left compromised and out of pocket. When materials and stock are essential assets in your small business, it’s crucial to protect them while on the move under a “Goods in Transit” policy as part of your commercial insurance. Likewise, if you are now storing goods/stock at home, it’s crucial to discuss suitable protection for theft or damage since your personal insurance policy will not cover you for risks arising from business or commercial pursuits.
* Load Shedding: Unfortunately load shedding is a reality for South Africans for the foreseeable future. One of the aspects to contend with is the fact that it compromises safety and security. Battery back-ups on security equipment such as electric fences, alarm systems, security cameras and outdoor motion passives can run out before power is restored. Once the power is back, your electronic equipment is also at risk of power surges, which necessitates the use of surge protectors where appropriate.
* Stay Vigilant: The lockdown and its devastating economic consequences have exacerbated the vulnerability of many South Africans, making it essential for all to remain vigilant, especially if you are home.
* Update your insurance: With the work from home movement, it is likely that you have had to make a few changes or additions to your home to accommodate the new normal, such as acquiring a printer, renovating your home to add an office space or adding a solar PV system or UPS to counter power outages. Don’t forget to update your insurance covers to include these additions to your home, or where applicable, to insure these additions under a business insurance policy.
Making sure that your remote or home office is covered for every eventuality starts by consulting with a broker who understands the risks you face in your personal and business capacities.
The value of a professional insurance broker comes to the fore when considering the various insurance aspects that could possibly impact your work environment and your pocket, making sure that your personal and business insurance toes the line.
A thorough needs-analysis will ensure that you are correctly covered at the inception of your policy, so that come claims time (and crunch time), there are no unforeseen surprises.