The Role of Short-Term Insurance in Supporting South Africa’s Growing SME Sector

Business Insurance

South Africa’s SMEs are the backbone of our nation’s economic growth, contributing significantly to job creation, innovation, and economic development.

According to McKinsey, SMEs represent more than 98 percent of businesses, employing between 50 and 60 percent of the country’s workforce across all sectors, and are responsible for a quarter of job growth in the private sector.

When these SMEs, a critical cog in South Africa’s economic engine, are shut down by economic risk factors, the effects are far-reaching and have broader macroeconomic implications.

This is where Risk Benefit Solutions (RBS), a leading national BBEEE level one short-term insurance broker in South Africa, steps in. Short-term insurance can provide a safety net, allowing SMEs to navigate uncertainties and focus on sustainable growth.

The Importance of Short-Term Insurance for SMEs:

  • Risk Mitigation: South African SMEs contend with various risks, including load shedding and high crime rates. Short-term insurance acts as a safety net, facilitating a swift recovery from setbacks and allowing businesses to continue operations without significant disruptions.
  • Business Continuity: Sudden natural disasters or accidents can threaten SMEs’ continuity. Tailored short-term insurance policies help minimise downtime, ensuring a swift recovery and maintaining business continuity despite unforeseen challenges.
  • Legal Compliance: Compliance with legal requirements is paramount for seamless SME operations. Insurance coverage, especially in liability and employee-related risks, ensures businesses comply with regulatory standards, reducing the likelihood of legal complications.

No two businesses, no matter the size, are the same. Taking insurance online or via call centre doesn’t save you money, but it does box you into a policy that might not be right for your business and how it operates.

Essential Insurance Policies for SMEs
  • Business Interruption Insurance: Running an SME comes with its share of uncertainties. Disruptions such as natural disasters, fires, or other unexpected events can halt your business operations, leading to financial losses. Business Interruption Insurance will cover the income you would have earned and the ongoing expenses you still need to pay when your business is temporarily unable to operate.
  • Litigation Risk Services: Given the constant risk of litigation in business, RBS’s qualified advisors collaborate with insurers and legal professionals to create solutions that reduce risk exposure and minimise the financial impact of potential litigation.
  • Cyber Insurance: In the face of the escalating threat of cybercrime, SMEs benefit from having some cover. Cyber insurance shields businesses from financial consequences by covering costs related to data recovery, legal fees, notification to affected parties, and more.

These are just crucial coverage areas, and RBS offers many more types of coverage, as listed below. We ensure we take a holistic view of your business and recommend and combine the critical protection your business requires.

Accidental DamageGoods in Transit
Accounts ReceivableGroup Personal Accident
Assets All RisksKidnap & Ransom
AviationMachinery Breakdown
Building CombinedMarine
Business All RiskMedical Malpractice
Business InterruptionMoney
Commercial CrimeMotor and Fleets
Contractors All RiskOffice Contents
Credit GuaranteePassenger Liability
Cyber InsurancePlant All Risk
Defective WorkmanshipPollution
Deterioration of StockProduct Efficacy
Directors & OfficersProduct Guarantee
Electronic EquipmentProduct Liability
Employers LiabilityProduct Recall
Employment PracticesProfessional Indemnity
Environmental ImpairmentPublic Liability
Fire and TheftTrustees Liability
GlassTax Insurance
RBS Insurance Types of Coverage

By recognising the importance of short-term insurance, SMEs in South Africa can strengthen their resilience, ensuring they survive and thrive in the face of economic uncertainties and risks.

About RBS

Risk Benefit Solutions, better known as RBS, originated as an entrepreneurial-focused services business in 1998 and today is one of the largest fully-fledged black-owned insurance brokers in South Africa and a Level One BBBEE contributor. Celebrating 25 years in business this year, our growth has contributed to offering clients a unique approach to risk management by positioning our skilled resources as an extension of our client’s risk management team. Our company covers various services, including Insurance Broking, Risk Management, Commercial and Corporate Risk Advisors, and Corporate Vehicle Hire Services. With its head office in Cape Town, RBS has offices in Gauteng, the Eastern Cape and globally, represented through its board membership with WING (Worldwide Insurance Network Group).