Given the precarious conditions prevalent in Nigeria, where both personal and business safety are compromised due to an ineffective Security mechanism, the risk of falling victim to burglary becomes alarmingly high, potentially resulting in the loss of all valuable possessions. Small and Medium Enterprises (SMEs), particularly in challenging situations, may find it highly challenging to endure such mishaps due to the high costs involved in restoring all lost items especially in the current inflated pricing environment.
Nevertheless, the existence of Theft/Burglary Insurance eliminates any cause for distress, as your insurance provider will fully compensate for all the goods that have been stolen or lost. The Insurance policy caters to the needs of businesses by providing coverage for their premises including protection for the stock in inventory, goods held in trust or on commission, fixtures and fittings, and the tools required for trade. Coverage under the policy is limited solely to safeguarding against Burglary and house breaking incidents, excluding any associated hazards such as theft in general, which falls outside of the defined coverage.
Insurers conduct inspections of the property and its area.
The protected property is only covered if it is lost from the insured premises and not from any alternative location. For instance, Industrial and General Insurance Plc. (IGI), a provider of such insurance, operates without any set tariff regulations for their premiums. Instead, they carefully evaluate each case based on its individual merits. Several factors come into play when determining the cost, such as the characteristics of the client, the level of risk involved, the market value of the property, and the security measures in place.
Determining the risk rating in initial loss policies hinges on the ratio between the maximum potential loss and the maximum coverage amount, all while considering the applicable discount. Insurance companies such as IGI Plc, Custodian, and Sanlam Insurance require a thorough completion of their proposal forms, inclusive of extensive details regarding the risk location and claims history. In many cases, insurers conduct inspections of the property and its surrounding area. The policy holds significant importance, particularly when the property is collateralized with a financial institution.
Vast number of SMEs have chosen not to secure insurance.
Adequate security measures are imperative for an insurer to approve the insurance proposal. Despite the meticulous planning of an extensive security system, its expenses pale in comparison to the premium paid for the Burglary policy. This is because the risk is effectively spread out and shared amongst all the policy holders. Dumebi Okonkwo, the head of Bancassurance and distribution at Old Mutual Nigeria, addressed this advancement by emphasizing the crucial role of Small and Medium Enterprises (SMEs) in terms of driving the economy.
Okonkwo lamented that despite this significance, a vast number of SMEs have chosen not to secure insurance, mistakenly believing that catastrophic events are unlikely to occur. When it comes to small and medium-sized enterprises, she emphasized the utmost importance of conducting thorough risk assessments to minimize potential financial setbacks. Insurance companies like Old Mutual offer a variety of insurance products specifically designed to protect SMEs within the nation. In order to maintain and safeguard a business, she pointed out that it is imperative for business owners to ensure protection for their assets, including equipment, vehicles, inventory, and workforce.
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She explained that insurance options including fire, theft, motor insurance, and group life insurance serve as vital solutions to shield entrepreneurs and their businesses from potential risks. Discussing the potential risks faced by business owners, Makanjuola Tubi, the Corporate Sales Chief at Old Mutual Nigeria, emphasized the availability of specific policies to safeguard against liabilities that may arise during business operations. These liabilities encompass a wide range of areas, including the sale of products, utilization of public spaces, and advice provided within one’s professional capacity.