Tourism is still a top contributor to South Africa’s economy, with over 10 million international visitors last year. It’s a labour-intensive sector, and depends on hospitality establishments, hotels, guesthouses, and B&Bs throughout the country that offer unique experiences to visitors.
Running these establishments is often rewarding and stimulating, but there are also a number of pitfalls that can trip up business owners. Events such as fire, floods, theft, and cybercrime can all result in loss of income. Public liability insurance and business interruption cover are both important.
In one recent case, a restaurant kitchen burned down, and the business had to stop operating while renovations were underway. Even though there was no income received, rent, electricity, water, salaries, and suppliers still had to be paid every month. Many businesses in similar circumstances would have to close down - but fortunately, the restaurant owner had taken out business interruption insurance and was covered. This is exactly why business risk management is so essential.
How can I risk-proof my guesthouse or hospitality business?
Risk-proofing your business means going beyond a standard insurance policy. In addition to comprehensive cover, you should also consider:
- Cover for your property, including equipment, contents of the guesthouse, and stock;
- Business interruption cover, which protects you if the business has to stop operating for a period of time;
- Machinery breakdown, to cover repairs or replacement of business machinery
- Protection against general liability in the hospitality sector.
Hospitality is a diverse sector. A guesthouse or boutique hotel can face a very different set of risks than a golf course or commercial hotel. This is where a broker or intermediary who has experience in hospitality, tourism can help you plan your coverage. For instance, if you have a catering establishment, you should have insurance against a client contracting food poisoning.
Also, look out for any insurance exclusions, as these could leave you unprotected. It’s important to know your policy conditions and operate according to them.
Even with the best risk management policies in place, it can be impossible to foresee every possible claim. So it’s important to understand the unique exposures you face, customise your cover accordingly, and put a risk management plan in place to protect your assets, reputation and livelihood. Draw up a business continuity plan and assess it regularly.
How Santam’s cover can support your business
One of the best ways to make sure you’re protected is to review your insurance cover at least once a year, and to discuss it with your broker or intermediary. This gives you greater peace of mind that, should the unexpected occur, your business is better positioned to recover and continue operating.
Santam offers a range of hospitality insurance options, from specialised guesthouse insurance to small business insurance to standard business insurance policies, which can be customised for you.
We know your business is your pride and joy. So our business cover allows you to focus on excellence while we take care of the risks.
Talk to a broker and make sure you’re protected. Get a business insurance quote today.