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Impact of insurance on businesses, properties

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By Abdulwasiu Usman

Coverage under the policy is limited to safeguarding against burglary.

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.

Related Article: Insurance industry premium to reach N700bn

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.

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24 days ago

Impact of insurance on businesses, properties.Coverage under the policy is limited to safeguarding against burglary.Express your point of view.

23 days ago

insurance’s effects on homes and enterprises. Protection against burglary is the only thing that the policy covers. -there is an extremely high chance of becoming a victim of burglary, which could mean losing all valuables. 

Adeoye Adegoke
23 days ago

Insurance plays a crucial role in protecting businesses and properties. While coverage against burglary is important, it’s essential to have comprehensive insurance policies that cover a wider range of risks. This can include fire, natural disasters, liability, and more. Having adequate insurance coverage can provide peace of mind and financial security in case of unforeseen events. It’s always a good idea to assess your insurance needs and ensure you have the right coverage for your specific business or property.

23 days ago

An insurer must approve the insurance plan if sufficient security measures are in place also . Insurance choices like fire, theft, auto, and group life insurance are essential ways to protect business owners and their enterprises from possible threats. Even with careful planning, the costs of a comprehensive security system are negligible when compared to the premiums for the burglary policy.