SME Insurance Plans in Nigeria You Should Know

SME Insurance Plans in Nigeria You Should Know

September 22, 2020 0

SMEs in Nigeria are major economic drivers, but many business owners often do not have plans in place for a worst-case scenario. Fire, floods or some other unforeseen problem could arise in the course of doing business. When they do, the protection of a safety insurance net might make the difference between the survival and death of the SMEs in question.

The Nigerian Insurance industry is a massive industry covering accidents from fire, auto, oil, gas, and so on. They also provide insurance plans that cover for SMEs because these are the backbone of the Nigerian economy. There are various things to consider when choosing the best SMEs Insurance Plans for your business needs. That’s why we are breaking down the types of Insurance policies available to your SMEs in Nigeria to help make the right call:

Insurance Plans for SMEs in Nigeria
Insurance for SMEs in Nigeria
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1. Fire And Special Perils Insurance Plan

This is a crucial SME Insurance Plan in Nigeria because it increases the chances of survival for SMEs. This insurance plan covers your business against damage and losses resulting from fire, lightning, explosion or storms. But it also protects your business from losses arising from floods, riots, strikes, and other enumerated special perils that may occur in your line of business.

If you recall, earlier this year, Nigeria had witnessed various fire incidents with most of these fires affecting business premises and markets. This insurance will protect your business against loss or damage as a result of rain, flood and storm because, under this plan, your insurer will pay back all your losses, giving you the capital you need to revive your SME.

An example of this plan is the Mansard insurance scheme for SMEs in Nigeria. The service was made available under the MTN ‘Y’ello Biz’, and the insurance package covers registered SMEs against fire, flood and other risks.

2. Professional Liability Insurance Plan

This insurance plan protects a professional business owner from claims or legal liabilities from their clients. It covers a professional SMEs business against negligence claims due to harm that results from mistakes or failure to perform and each industry has its own set of concerns that will be addressed in a customized policy written for a business.

Claims can arise as a result of error, negligence or omission during the course of carrying out your professional duties; and that’s why this plan is essential. This type of insurance is useful if your small business involves selling professional skills or knowledge so if you run your small business as a doctor; lawyer, accountant, or other such professions, having this insurance cover will protect you against damages or claims brought by a client in a court of law within Nigeria. The policy also covers financial losses or legal costs; AIICO Insurance and Zenith Insurance offer online consultations for this.

3. Product Liability Insurance Plan

Unlike the professional liability insurance policy which is tailored to an SME owner’s professional duties, the product liability insurance plan for SMEs in Nigeria works to protect small businesses from liabilities, claims or damages that may arise from the use of its products. 

OIAS offers this SME insurance plan in Nigeria and under this type of policy, financial coverage is provided for the SMEs owner, tailored specifically to his or her specific type of product. Product liability insurance is important, especially for SMEs in Nigeria that manufactures products for sale on the general market. 

4. Business Interruption Insurance Plan

SMEs in Nigeria get interrupted by various events, whether natural disasters or a byproduct of bad governmental policies. The result is that these businesses suffer from income lost while their operations are interrupted and this type of insurance will compensate your business for its lost income at such times. This policy applies to companies that require a physical location to do business, such as retail stores. It takes care of all the costs related to material damage. It also replaces business income lost as a result of fire outbreak, lightning, explosions, or some other specified events which disrupt business operations. 

Depending on the insurer, this SME Insurance Plan in Nigeria can sometimes cover profits that would have been earned had business operations not been disrupted, operating costs based on previous statements of costs and employee wages. SMEs in Nigeria currently that have this policy will undoubtedly recover faster from the coronavirus lockdown losses because they would receive the settlement from their claims.

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5. Commercial Property Insurance Plan

Whether your SME owns or leases its space, property insurance is necessary because it covers all your business equipment, signage, inventory and furniture in the event of a fire, storm or theft. The extent of the protection given by this SME insurance plan depends on the terms of each particular policy and this is why you should go through your contract very carefully. If the property you want to be covered isn’t protected, don’t be afraid to insist it be included or to look for a new insurer.

Also, as a result of this pandemic, many SMEs in Nigeria are operating out of the CEO’s homes. If you’re operating your business out of your home, ask your insurer for additional insurance to cover your equipment and inventory in the event of a problem. Combined All Risks Insurance Brokers (CARIB) Nigeria Ltd offers this policy.

6. Goods-In-Transit Insurance Plan 

If you are running an SME in Nigeria focused on hauling of goods from one city to the next, then you might want to consider protecting your goods when on the road with this kind of insurance plan. Due to the poor states of our roads, an astonishing number of accidents take place each day and almost always involves lorries and cargo trucks spilling over their contents on the streets.

The goods-in-transit insurance plan covers your goods from such perils on the load so that even if you lose the goods in transit, you wouldn’t lose your money’s worth as well. It also protects your goods against fire, theft or accidental damage while the goods are being loaded or unloaded, or whilst temporarily housed within the general course of transit. 

7. Burglary Insurance Plan

This is usually combined with fire and special perils insurance but covers the contents of your SMEs business against loss or damage caused by theft from your business premises. There must be forcible entry and/or exit for the insurance company to be liable though and even though money-related items are generally excluded here, you can still add or list them under this burglary policy. 

Doing business in Nigeria is often adversely affected by the activities of thieves. If a break-in occurs on your business and your equipment is stolen, your business insurance policy will cover the cost of replacing the stolen property and sometimes this is all you need to keep your business from going bankrupt.

Finally, when you take out any of these SME Insurance Plans In Nigeria for your business, you’ll be protecting your assets and inventory towards unforeseen circumstances. Understand the underlying conditions of any SME insurance contract you are planning to sign because this will help you understand how much risk your business is exposed to. It will also ensure that you have a hassle-free claim experience in the unfortunate event of any loss.

Samuel Moore
Samuel Moore
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