Insurance and SMEs
SMEs suffer the most from disasters such as the fire outbreak at Katamanto in Accra last week

Insurance and SMEs

One of the country’s biggest markets, Kantamanto, was razed down by fire a couple of weeks ago. The disaster saw more than 200 shops belonging to small businesses completely damaged.

On a yearly basis, fire and other natural disasters such as flood, hit many markets in the country leaving many small business owners in a state of hopelessness and grief. In some instances, some of these business owners die out of shock because they have lost everything they have to unforeseen occurrence.


Many findings have established that, in the markets where majority of small businesses operate, fires for instance, are often caused mainly as a result of power fluctuations, cooking with naked fire in the market and overloading of electrical appliances among others.

Further studies also have it that, less than one per cent of such small businesses are insured although individually, a handful have personal life insurance policies.

Small businesses and insurance

Small businesses face many risks and are better off insured than not. Not all small businesses have the insurance they should and as a result, they are at risk. These are a few reasons why insurance is important for small businesses.

It takes a lot of funds to set up a business no matter how small. Overtime, this business grows and as profits are ploughed back, stock increases. In some instances, loans are taken to stock or restock. These are investments that can be lost within a twinkle of an eye. It could be through fire or any natural disaster. Once lost, the business could be done and the evidence is there to recall through the many market fires and floods that consume properties of small businesses in the country. The loss can be recovered only if one insures the business to protect their investment. It’s not easy paying money every month or yearly when one does not really see the benefit. But that is why it’s called insurance. Seek advice and insure your business today and protect your investment.

If you are renting the space your business operates from, a landlord's insurance policy might not cover you. Having insurance is beneficial in this situation in case something happens.

Another situation to consider is if you are borrowing money to finance because the loan agreement you sign will likely ask for proof of a specific type of insurance.

Lastly, some individual contracts that you have with clients may require insurance in case something goes wrong. Note that, even as a small business, you may bid for a contract from government or a reputable company that requires that you have insurance. Do not lose that contract because you have not insured your business.

Workers' compensation claim

Workplace accidents can happen any day at any time. Without insurance, your small business (and frankly, you) are going to be paying for that employee's workers' compensation out of your pocket.

If an employee gets a serious injury that doesn't allow them to work any longer, workers' compensation will cover the medical bills and pay benefits for that employee.

This can reach into the hundreds of thousands of Ghana cedis quickly which can lead to your financial ruin.

Natural disasters are a common occurrence and they are highly unpredictable. Particularly in the country today, flooding has fast become the most common cause of loss of property.

Note that if your business is not insured and a natural disaster occurs, your business might be physically destroyed with no financial backup for repairs or replacements.

Regardless of what kind of natural disaster it might be, property insurance is what one needs.

This is a very important type of insurance for any business to have but especially for small businesses that don't have the capital to completely replace things if they get suddenly destroyed.

Another benefit of having property insurance is that it covers vandalism, fire, as well as theft.


Typically for some businesses, it can be hard to see the value of buying something such as insurance because it is intangible and is something that they don't always use. It is not something that they will need all the time. However, it must be noted that insurance is something that one will need when one needs it.

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