Is your business adequately protected against risk? We round up the key insurance products for tourism businesses.
- Asset insurance
Juan Coetzee, Assistant MD at Hospitality & Leisure Underwriters, says businesses need to insure their material assets. This would include buildings, contents and vehicles. “The level of cover needed and the choice of the items to be covered will be determined by the business, but is dependent on the size of the concern and the businesses appetite for risk,” he says.
André du Toit, Director of SATIB advises businesses to insure their assets for the replacement value. Paul Halley, National Head Hospitality: Zurich Insurance Company, says fixed and moveable assets should be covered against fire and natural peril exposures as well as crime related losses.
- Liability insurance
“General Liability exposures include injuries or even death of guests or customers when ‘in the care’ of their guides or drivers,” says Haley. He points out that unlike asset insurance, liability cannot easily be quantified in advance. Coetzee advises business owners to make sure that their business has the correct liability programme in place and that all the relevant activities associated to the business has been declared and the insurance company is aware of them.
General public liability is absolutely essential, says Du Toit. “Your typical liability policy would not necessarily include what is generally termed hazardous pursuits, which is the game we play in tourism” he explains.
- Business interruption
It is also important for business to be insured for a loss of profits, says Coetzee. “Correctly insuring your loss of profits is paramount to continuing the business after a loss,” he says, adding that a businesses’ standing charges will continue even if it is no longer functioning and therefore these too need to be covered.
Business interruption protects business owners from a loss of income caused by the business being operational, for example in the case of a fire or flooding, says Du Toit. “The policy would pay out for the loss of earnings for that period,” he explains. The period would include reconstruction as well as regaining of market share. Du Toit points out that a lot of businesses do not understand the importance of business interruption, and only insure their assets. However in the case of damage to these assets, because business are often not operational for a period, the total loss to the business exceeds the replace value of its assets.
- Professional indemnity
Professional Indemnity deals with the liability the operator is exposed to in the professional and contractual conduct of their business and provision of their services, explains Halley. “It is their legal responsibility to ensure they provide quality, current and accurate advice and perform their services diligently and responsibly including the use of quality, compliant and responsible suppliers throughout the extended value chain,” he says. “Errors, omissions, incorrect advice or neglect of their client’s needs can result in them becoming legally liable. The quantum of these cannot be determined up front.”
