Recent years have witnessed a shift in the Zimbabwean economy towards rapid informalisation reflected through the rise of SMEs and individual traders. Finscope estimates that over $7,4 billion was in circulation in 2012 in the informal sector whilst it is further assumed that SMEs contribute close to 20% to the GDP. Similarly SMEs are credited with creating employment for over 2 million people in Zimbabwe. Nonetheless the rising prominence of SMEs has not been localised to Zimbabwe, other developing countries such as India and Malaysia are renowned for their economically significant SME sectors. The SME Chamber of India reports that SMEs contribute an estimated 45% of industrial output, 40% of exports and produce of over 8000 products for the Indian and International markets. As a result the Indian economy has been rapidly growing.

Clearly with the right kind of support and resources, SMEs in Zimbabwe have the potential to transform the economy. Nevertheless, unlike India most of the local SMEs remain small and unregistered plagued with a host of challenges which include lack of financing, poor access to markets, limited knowledge and resources as well as delayed adoption of technology. Another critical challenge for SMEs, often times overlooked, is the lack of security against adverse or catastrophic events that threaten business continuity. Typical examples of catastrophic events include destruction of premises by fire, damage to finished products, accidental damage to delivery vehicles and even theft by a key employee(s). Taking cognisance of the limited financial resources coupled with cash flow challenges typically faced by SMEs, any one of the above scenarios can have a grave impact on business sustainability.

As a viable solution to addressing the business threats faced by SMEs, NicozDiamond has structured various insurance covers to mitigate the bearing of these threats. Typically the insurance protects small businesses against damage to property, guards against financial losses and also defends the business against liability arising from negligence. Other insurance covers exist that provide a fixed benefit in the event of an accidental death or injury e.g. employee injury in an accident.

The following are some of the standard insurance products that can be considered for small businesses:-

  • Motor Comprehensive Insurance: This cover protects the business vehicles against accidental damage plus covers compensation owed to third parties for property damage and bodily injury.
  • Fire Cover: This cover indemnifies against damage to business premises and stocks arising from fire and other causes such as lightening, flooding and storms.
  • Theft and Money: These insurance products protect the business from theft, burglary and robbery of key assets.
  • Fidelity Guarantee: This cover protects the business from the corrupt and dishonest actions of employees.
  • Business Interruption: This insurance protects the business owner against loss of income arising from an occurrences such as fire, flooding and storms that affects the business’s ability to continue its operation as normal.
  • Liability cover: Insurance covers against legal liability arising from damage to third party property or bodily injury in the normal course of business e.g. brick falling on the head of a passer-by.
  • Personal Accident cover: It will pay benefits in the event of accidental death or severe injuries which result in permanent disablement.

NicozDiamond has also created partnerships with key organisations in the SME sector such as SMEDCO and developed tailor made insurance solutions to cater for the diversity in the sector.

Aside from the obvious benefits of providing security against risks encountered in the course of business, possessing adequate insurance cover may improve credit rating when sourcing for finance. This is because insurance secures the collateral and also acts as a guarantee for business continuity and hence future loan repayments. Finally NicozDiamond offers risk management consulting services for their clients at zero additional costs.

Over and above, insurance is an effective risk management tool that enables smallholder businesses to transfer the risk of a loss to insurance companies who are experts in handling risks. Clearly SMEs profit by paying a moderately low price to the insurer whilst gaining defence against the likelihood of sustaining a much larger financial loss. Ultimately insurance allows a small business owner to actively pursue high risk growth opportunities confidently without fear of loss.

For more information about NicozDiamond Insurance please contact us on the following:

Tel: 263-04–799286, 700297, 701133, 704911, 251008, and 700146 Fax: 263 04–704134, 700083 Email: [email protected] <mailto:[email protected]> or [email protected] Website: www.nicozdiamond.co.zw <http://www.nicozdiamond.co.zw>

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