In light of SMME Day, we delve into the primary challenges confronting South African businesses and offer valuable insights on proactive measures and strategies to consider to mitigate these issues.
The continued threats of load shedding and crime, coupled with the effects of the rising petrol price and interest rate hikes, as well as severe weather events due to global warming have had immense knock-on effects for small businesses.
Crime remains the greatest risk
The release of the latest SAPS quarterly crime statistics unequivocally illustrate that crime continues to pose the greatest risk to businesses. Commercial crime has surged by 10.1%, business burglary by 12.2% and shoplifting by a staggering 20.3%.
Each criminal incident, whether it involves stolen merchandise or cash, directly affects the bottom line of small business owners. Crime not only exacts a direct cost through loss of assets and funds but also imposes indirect expenses such as increased security measures, burglary-related repairs, temporary business closures, and lost working hours.
Ensure that you are adequately insured
Life can be unpredictable, even more so in the world of business, where even the smallest disruption can significantly affect your livelihood. Ensure that you are adequately insured by talking to your broker for a product option specifically designed to provide peace of mind against the unique risks that your business faces so that you can focus on what you do best – getting on with business.
It is of the utmost importance that the descriptions and replacement values of all your assets, as well as the descriptions of all security measures such as tracking devices or vehicle and building alarms, must be noted 100% correctly on your schedule as all claims settlements will be based on the information noted in your policy schedule.
Declare any changes
Businesses are urged to immediately declare any changes to their risk that may affect their cover and insured values. If you are uncertain about the impact of a change, you should contact your broker for advice. In the current economic climate businesses simply can’t take the risk of any interruption to production or services rendered.
Another formidable threat confronting businesses is the alarming increase in cybersecurity crimes. According to INTERPOL’s 2022 Africa Cyberthreat Assessment report, South Africa leads the continent in the number of cybersecurity threats, with 230 million threat detections identified in 2022.
South Africa saw a 100% increase in mobile banking application fraud and is estimated to suffer 577 malware attacks an hour. The average cost of a data breach in the South African business landscape is R40 million, excluding reputational damage.
Despite these concerning statistics, many SMME’s believe they are not viable targets for cybercriminals and hold the belief that they won’t be affected and consequently opt against acquiring cyber insurance.
No business is immune
Among our commercial clients we have noted a rise particularly in the interception of company documents containing bank details which leads to enormous financial losses when unsuspecting customers pay funds into the bank accounts of cyber criminals instead of the intended company. Any business with a computer network, regardless of size or sector, is potentially at risk of being a victim of a cyber-attack and should therefore prioritise their approach to cyber risk management.
There are various cyber insurance cover options in the market ranging from security and privacy liability, data recovery and loss of income, to business interruption and loss of business income.
A shifting risk landscape
The concerning surge in cybersecurity crimes serves as a clear indication of a shifting risk landscape and highlights the importance of educating businesses about the purpose and significance of integrating cyber cover into their insurance portfolios.
In the ever-evolving realm of risk management, businesses encounter a multitude of complexities that demand expert guidance. From the intricate interplay of adverse weather, the ongoing energy crisis, opportunistic crime, crime syndicates, to the ever-advancing techniques of cybercrime, the need for a knowledgeable broker has never been more critical.
Rely on a trusted broker
A skilled broker not only provides businesses with the best advice on risk management but also becomes an integral part of the organisation, forging strong relationships that underpin long-term success. By relying on a trusted broker, businesses can navigate the intricacies of risk management with confidence, knowing they have a dedicated partner who understands their unique needs and can offer tailored solutions for mitigating risks and ensuring uninterrupted business continuity.