Starting your business this year? Here are some insurance tips

Starting a new business can be difficult, as you may face challenges that you haven’t encountered before.

Another difficult thing is safeguarding yourself and your business from any misfortunes. 

Many small and medium enterprises (SMEs) often overlook insurance, yet it can give you some peace of mind.

Setback for business

Karen Rimmer, Head of Distribution at PSG Insure, says up to 80% of small businesses fail within the first five years, one big setback can result in closing your doors.

“So, whether you’re planning on operating from rented premises, your home, or entirely online, the right insurance solutions can mean the difference between success and failure when the unexpected occurs.”

ALSO READ: When Januworry bites do not cancel your insurance

She outlines five things to consider about insurance when starting your business in 2025:

1. Do you have the right cover for your premises?

Rimmer says securing adequate insurance for your business premises is essential when it comes to your physical location.

“Commercial property insurance typically covers risks such as fire, theft, and natural disasters.”

She advises businesses renting to ensure they understand their lease agreement and be prepared that the landlord is responsible for insuring the property structure and you, its contents.”

2. Have you considered internal risks?

“Businesses rely on people, and protecting your workforce and reputation is just as important as protecting physical assets,” Rimmer adds.

Depending on the nature of your operations, you may need:

Fidelity cover protects against losses incurred due to employee theft or fraud. This is particularly relevant for businesses handling significant cash flow.

Professional liability insurance covers businesses that provide advice or professional services. It safeguards against claims of negligence or errors that could result in financial losses to clients.

ALSO READ: Eastern Cape floods: Is your house, car, business insured for natural disasters?

3. What about cyber threats?

She says the rise of digital business operations has brought a surge in cybercrime, making cyber liability insurance necessary for businesses of any size.

“In addition to securing cyber insurance, implementing strong, proactive cybersecurity measures is critical.

“By regularly updating software, using multifactor authentication, and educating employees about phishing scams, you can greatly reduce your exposure to cyber risks,” Rimmer adds.

4. Are you prepared for the unexpected?

Business interruptions can impede operations and lead to significant financial losses. She advises business owners to have Business interruption insurance to help cover lost income and higher operating expenses during interrupted trade.

“In addition to business interruption cover, many businesses will also have high-value assets such as machinery, and it’s vital to ensure these items have sufficient insurance so that you can recover quickly in the face of theft or damage.”

ALSO READ: Watch out for these insurance scams

5. How can you stay one step ahead?

Rimmer adds that insurance works best alongside proactive risk mitigation strategies.

“It is important to conduct regular risk assessments to identify vulnerabilities and implement measures such as advanced security systems, employee training, and robust data backup protocols.”

NOW READ: Answers to the 6 most popular insurance questions