Insure small businesses


THE devastating Lusaka City Market fire, which led to the loss of business and property for about 2,000 Lusaka traders, should somehow prompt many business

owners to consider their preparedness for disaster.
Beyond the obvious emotional impact, loss of property and business, insurance of business is one of the options that needs serious consideration going forward.
Without Government rendering a helping hand to the people affected to re-start their business through the Vice-President’s office, many of the traders will kiss goodbye to their businesses and subsequently be relegated to destitution.
Insurance, which many small and medium entrepreneurs rarely talk about or even invest in for various reasons known to themselves, is very cardinal.
Although relatively new to most small and medium enterprises (SMEs), insurance is very important.
This is because it offers security to businesses that, should something catastrophic happen to one’s business, an insurance company is going to compensate for the loss.
Insurance matters because it keeps one business moving despite tragedies faced. It also gives one a peace of mind and business owners can take on certain business ventures because they can shift the risk to the insurance company.
Insurance is a safety net when risks go wrong. Life insurance, for example, can support the life of a family, should a member be lost. It’s similar for a business. Should a key member or piece of equipment go out of commission, fire and other calamities occur, the business can carry on if it is insured.
If a business goes wrong, the big businesses will be able to survive. They can take a hit. But the small ones can’t take a hit as witnessed from the City Market inferno.
As a result, they are more at risk, and in some cases, they sell out to the big businesses.
One of the affected traders, Peter Chanda, who is also Vendors Self-help Association chairperson, said he has lost stationery equipment worth thousands of Kwacha.
The traumatised Mr Chanda said Lusaka City Market was his only source of livelihood.
“This is a loss which is difficult to replace, we only thank God that no life has been lost,” he said.
With insurance, however, people like Mr Chanda have support if they want to take a risk, which means they stick around longer. Therefore, insurance helps prevent monopolies from forming.
Insurance companies should therefore target the small and medium enterprises with insurance packages that meet their needs.
Most times, insurance for SMEs is viewed as expensive, but if companies could package it in such a way that it becomes affordable for the people at the grass roots, many traders would take the chance to have their businesses covered.
Helping traders understand the benefit of insurance also helps because, as the case is, very few traders at City Market know what insurance is and its benefits.
The loss of uninsured goods marketeers suffer whenever infernos are recorded at trading places makes it difficult for them to restart their businesses.
In Zambia, generally, insurance is very low and is only needed in times of calamities, but it is time people took it as an important part of their business and lives.
Recently, in Lusaka, an insurance life cover for marketeers and small-scale farmers was initiated by the Zambia National Marketeers and Credit Association (ZANAMACA), Liberty Insurance and Uniturtle Industries.
The insurance called Tontozo is aimed at helping many people in the informal sector to meet funeral expenses each time they have a bereavement.
It is also important that Government backs the legislation meant to support the insurance sector in the country.
This should also be coupled with sensitisation, making sure the small-scale business people understand the benefits that accrue when one has their business insured.
This is because many families depend on income that is generated from markets for their livelihood and personal development.
SMEs should therefore take up insurance cover to enable them continue with their normal businesses when faced with calamities rather than waiting upon Government to assist them in one way or the other so that they could restart their businesses.
The author is a Zambia Daily Mail senior reporter.

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