How to protect your business against risks

THE PUNCH Newspaper- Nike Popoola

After a hectic business on Wednesday, 24th of March, the traders, artisans and plank sellers at Goodwill Sawmill Nigeria Limited, Gbagada Industrial Estate, Lagos had thought that they will get back to work the following day to count profits as usual, but unfortunately, ended up counting losses in billions.

At on that fateful Wednesday, an unexpected inferno started which leveled the business environ where their business was situated.

Before the fire fighters could put out the inferno, it had done a great damage by destroying the works, machines, furniture, building and interior section of the businesses.

This is just one out of the many risks that could happen to any business.

When losses of such magnitude occur in our society, there are usually calls to the government and sympathizers to come to the aid of the victims, of which such help may or may not be forthcoming.

It is worth of note that the African society is becoming more civilized coupled with economic challenges which is making each individual to cater for his nuclear family and reducing the assistance a person could render to relatives.

For this reason, experts have canvassed the need for individuals and corporate organisations to adopt a mechanism that can help to protect them from the adverse effects of losses that could happen to them or their assets.

Insurance, they say, is the best mechanism because it is the only institution that exists in order to ensure the continuity of other institutions.

They stress the relevance of insurance as a basic necessity for every individual and organisations because it restores them to their former positions whenever a loss occurs thereby, helping to reduce economic waste.

To majority of businessmen, setting up their businesses is their only priority as they seldom think of making provisions for unforeseen circumstances capable of kicking them out of these businesses.

Certainly, economic businesses are the main sources of survival of everybody and for this reason; every businessman should consider protecting his business against risks as soon as he starts the business.

Just as there are different types of businesses, there are different types of risks that they are exposed to.

To minimize or restore loses that emanate from these risks, the insurance institution exists to play the prominent role of reducing economic wastages and ensuring the continuity of businesses and organizations.

Experts say that there are different types of life and non life policies that are available to businesses to secure their operations from unfavourable circumstances.

The policies under the non life insurance cover include fire insurance, general accident insurance, motor vehicle insurance, marine insurance and burglary insurance among others.

Some of these policies will restore losses as a result of fire outbreak, theft and other risks covered in the policy.

Others are energy insurance, engineering insurance, miscellaneous insurance, bonds credit guarantee and suretyship insurance among others.

Firms can take cover to secure their cargo or goods being transported from the point of purchase to delivery point under what is referred to as marine cargo policy.

Likewise, goods in transit provide compensation for loss or damage to the whole of the property described in the policy of the insured due to the risk by means of conveyance or other means.

Under the life insurance business, the policies such as individual life insurances, health insurance, group life assurances and annuity among others will protect the lives of the workers during their working years.

Other life insurance policies such as workmen compensation and others can also be undertaken for the workers.

The Managing Director, Consolidated Hallmark Insurance Plc, Mr. Eddie Efekoha, stressed the need for people to put into their consideration, the need of a mechanism that could protect them from losing what they have.

He said, ”If I put all my hard earned money in my project or business bearing in mind that I don‘t have extra that can replace it if anything happens to it without transferring the risk to the insurance company, what will happen if anything happens to it,”

Efekoha said that when a person has insurance cover, the insurance company will help the insured to replace everything that he had lost.

The Managing Director, Crusader General Insurance Limited, Mr. Nimbe Oviosu, said that insurance companies exist to protect the assets of the business men so that they are not thrown out of business.

He said, ”Insurance companies are set up to protect their assets, they have the duty to pay claims to the insured anytime there is a loss.”

According to him, the insurance companies were responding faster to claims issue and that the National Insurance Commission had set guidelines to ensure that policy holders are protected.


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