There is good news for those who wish to take advantage of the insurance plan for business in Nigeria? No matter if you’re a professional in your 20s or a parent of two children in your 40s, investing in insurance will always be a wise option for your financial security. Your family and you may be financially safe, but an unexpected incident or accident could place you and your family in financial straits.
However, lots of people think of insurance as an emergency fund that will provide them with protection when they need it most. They don’t like this as they believe that their premiums are put aside for an unforeseen disaster that could not occur very soon instead of growing in value as they would with other investments. It’s a piece of good news for those who wish to take advantage of the Insurance Plan for Business in Nigeria.
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SMEs – Insurance Plan For Business In Nigeria
Small and medium-sized businesses (SMEs) typically stay out of the insurance loop due to various reasons, ranging from inexperience to the cost. The corporate calculations at the bottom of the ladder for enterprises are different from those at the top, which leads to smaller companies taking greater risks that are not covered.
Small-scale insurance is similar to rushing through the sun without an umbrella. The consequences could be uncomfortable however; the decision is more a result of ignorance more than the inability to pay.
Analysts are beginning to realize that small companies do not protect their assets simply because they don’t wish to, but rather because they can’t afford to and so on. The issue with small-scale business insurance is an understanding of cost rather than a sense of loss. Smaller-sized business owners tend to charge their products or services without considering the cost of insurance, thus undervaluing the price of their products or services. In times of crisis, they are more likely to be in a state of regret than being secure.
What exactly is an SME?
They may seem small however they are the foundation of many robust global economies. Research data suggests that the total cost for starting a micro-enterprise (including working capital but not including the cost for the property) will be N5m but it is not more than N50m which is a labor size of 10 people.
The cost to start a small business (including working capital, but excluding the cost of land) is between N5m to N100m however, it should not exceed N200 million and a workforce between 11-50 workers. The total cost for beginning a medium-sized business (including working capital, but not including the cost for cost of land) ranges from N100m and N500m and a workforce size between 51 to 200 employees.
There are a variety of insurance plans or insurance schemes that are essential to the risk management of SME companies. The types of risk protection plans comprise Liability Insurance, Business Property Insurance, Worker’s Compensation Insurance, Health Insurance, Life Insurance, and so on.
Everything You Need To Know About Insurance Plan For Business In Nigeria
Small and medium-sized businesses require standard insurance protection plans, some of which are:
1. Fire and Risk Insurance
Fire and Risk Insurance is an essential insurance plan for SMEs that operate in Nigeria. It protects your business from earthquakes, fires, earthquakes as well as floods, tsunamis social unrest, or intentional damage that can be incurred in the course of your business.
A good example of this is at the conclusion of the SARS protests, which affected business areas and the markets. This insurance plan is designed to protect your business from loss or damage due to floods, rain, and storms. With this plan, the insurer will reimburse you for all of your losses and provide you with the capital you require to revive your SME.
2. Professional Liability Insurance
A Professional Liability Insurance plan protects the business owner from claims or legal liability from their customers. It shields professional SME businesses from claims of laxity caused by damage resulting from mistakes or inability to meet their obligations. Each sector has its own set of issues which will be addressed in a specific policy that is designed specifically for business.
This is important due to the possibility of claims arising because of mistakes, or negligence while performing your professional duties. This insurance policy is designed specifically designed for small-scale businesses that sell professional expertise or know-how.
For instance accountants, doctors, lawyers, or any other profession; this insurance policy will safeguard you from claims, or damages that are brought by clients in a court in Nigeria. It will also cover financial losses and legal expenses.
3. Products Liability Insurance
This kind of insurance plan designed for SMEs in Nigeria safeguards businesses from claims, liabilities, or other damages that could arise through the usage of the products. There are a few insurance firms in Nigeria that provide this service to SMEs. With this type of insurance policy, financial insurance is offered to SME owners and is tailored to the particular type of product. Insurance for product liability is essential particularly for SMEs that are located in Nigeria and manufacture products that are sold in the market.
4. Business Insurance Plan Insurance
Natural disasters or poor policies of the government are some of the problems faced by SMEs. Small-sized businesses typically experience financial crises as a result of these challenges. In the event of a business interruption, the Insurance policy will reimburse the business for its loss of revenue in the event of a crisis. This policy is available to businesses that require a physical place for business operations, for example, retail stores that have been closed by the government due to ongoing construction across the state or paving roads.
Business owners who are new to the business typically witness the devastation of their hard-earned work; therefore the Insurance plan for business in Nigeria will cover all the expenses associated with damages. It will also cover business income that is lost due to fire and explosions, lightning, or other incidents that cause disruption to the business.
An insurance plan for businesses in Nigeria may cover the earnings that would have been made in the event that business operations were not affected, as well as operating costs that are calculated based on prior statements of expenses and wages for employees. SMEs that are in Nigeria currently covered by this policy will definitely recover faster from the coronavirus lockdown and the #EndSARS protest since they will get compensation for their claim.
5. Commercial Property Insurance
Commercial property insurance covers the entire business equipment, inventory, signage as well as furniture, in case of a fire or the time of a crisis. The amount of insurance coverage offered to you by the SME insurance plan is contingent upon the basic policy of each one and, therefore, you must go through the policy carefully.
If the property that you would like to protect isn’t secured, don’t be afraid to request you include it or find a different insurer. In addition, due to this outbreak, many Insurance plans for businesses in Nigeria are working from remote locations. If you run your business from your home, inquire with your insurance provider for additional insurance to protect your inventory and equipment in case of an issue.
6. The Goods In-Transit Plan for Insurance
If you run SMEs in Nigeria that focus on the transportation of items from one city to the next, you should think about protecting your products on the road by implementing the help of this insurance plan. Due to the bad condition that our roadways are in, numerous accidents occur every day, and most of them involve cargo trucks and Lorry spilling their contents onto the roads.
An insurance plan for business in Nigeria for goods in transit protects your items from these risks in the process of loading, in order that when you lose your items in transit, you’ll not lose your money either. Also, it protects your possessions against theft, fire, or accidental damage when the items are being unloaded or loaded or while they are temporarily stored within the normal course of transportation.
Conclusion
Business owners who are new to the business typically witness the devastation of their hard-earned work; therefore the Insurance plan for business in Nigeria will cover all the expenses associated with damages.