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Insure Your Business Against Liability

Is your business insured?





Most, if not all, directors of major corporations will not take on a position if the company does not insure them against personal liability. With the New Consumer Act, this has become even more important than before, but what of SMEs?

“The CPA doesn’t distinguish between companies,” explains Philip Hobson of Chartis Insurance. “The same act covers multi-nationals and mom and pop stores. The problem is that SMEs are more exposed – they don’t have the same resources as major corporations.” Major corporations might be able to foot the legal bills of liability lawsuits, but they still take out insurance on their key players. Conversely, SMEs, who often cannot afford expensive legal battles, do not have insurance.

Corporate liability

“If directors are found to be liable for negligent behaviour, they are held in breech personally,” explains Hobson. “The court would need to prove negligence, but simply thinking he or she was acting in good faith would not be enough. You don’t need to be malicious to be found negligent. If a director has not acted in the best interests of the company and its stakeholders, they are guilty.” If found guilty, the insurance would cover costs – unless fraud was committed.

However, even if the director is found innocent, there are still huge costs associated with this form of litigation. Two recent and well-known cases of directors who were insured by Chartis cost R40 million and R15 million a piece, and even though in both cases the directors were found innocent of all wrong doings, they still needed to pay their legal fees. If they hadn’t been insured, this would have been their personal cost to bear.

SMEs and liability

While director liability might seem to fall within the purview of large corporations only, in reality any stakeholder can bring a case against a business owner or director. “Our biggest claims have been from liquidators. Creditors lose money and appoint a liquidator to go after a director personally to recover costs,” explains Hobson.

For many business owners, they are the company, and suing one effectively means suing the other. As an SME owner, can you afford to be sued?

Insurance shouldn’t be used to buck the system or contravene the Act. It’s a safety net. “Insurance is not luxury purchase. It’s a necessity,” says Hobson. “But it doesn’t need to cost an arm and a leg either. As the business owner, you decide your own exposure. The things you should think about include who your customer base is, how officially you comply with Act, the territories you operate in, how much various insurance packages cost and what you can afford.

“Speak to a broker and discuss the level of insurance you need and what size policy suits you and your business. Brokers will give advice and evaluate what level of exposure you and your company are exposed to, and will tailor a product accordingly.”

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

Entrepreneur Today

EY Honours Southern African Entrepreneurs Who Redefine Convention And Inspire Change

This year EY marks 21 years of recognising and celebrating entrepreneurs who have consistently demonstrated excellence in their businesses.





Since the first award in 1998, when Adrian Gore of Discovery was the inaugural winner, EY continues to see trailblazing entrepreneurs whose vision is shaping industries, creating new markets and generating employment opportunities while contributing to economic growth and development.

We are excited to announce, in alphabetical order by company name, the 2018 finalists:

  • Camelot Group: Deborah Merdjan
  • Cash Flow Capital: Xan Myburgh
  • Davipel Trading (Private) Limited: Davison Norupiri
  • Growthpoint Properties Limited: Norbert Sasse
  • In2IT Technologies (Pty) Ltd: Saurabh Kumar
  • Tiletoria (Pty) Ltd: Patrick Thonissen
  • M&M Brands: Zibusiso Mkhwanazi
  • Mobicel Communications: Ridhwan Khan
  • We Buy Cars (Pty) Ltd: Dirk van der Walk & Faan van der Walt
  • Valemount Trading (Pty) Ltd: Damien Westerman

Roderick Wolfenden, EY Africa Markets Leader, says: “We are delighted to celebrate and recognise these game-changing entrepreneurs from Southern Africa, and acknowledge their incredible achievements.”

“These entrepreneurs demonstrate extraordinary business acumen, financial performance excellence and inspired strategic direction. It is encouraging to see the tenacity and strong entrepreneurial spirit these business leaders have shown in their environments, which are often characterised by uncertainty and disruption. These and most entrepreneurs embrace bold thinking that often sees opportunity in adversity; a relentless drive to build a better working world; and an unwavering commitment to solving their clients’ issues,” he adds.

Related: Blood, Sweat And Tears – The Journey To Becoming Emerging Entrepreneur Of The Year®

About the programme – locally and globally

The awards programme provides the finalists with an opportunity to connect with local and international businesses, and join a global network of entrepreneurs who share their experiences and perspectives. The Southern Africa awards covers: Angola, Botswana, Namibia, Mozambique, Malawi, Mauritius, Madagascar, South Africa, Zimbabwe and Zambia

This year’s award event will be hosted on 29 November 2018 in Johannesburg – South Africa and following that the overall winner will go on to compete for the prestigious title of World Entrepreneur Of The Year™ in June 2019.

Website – EY Awards

The EY World Entrepreneur Of The Year™ Awards programme culminates in an annual gala banquet in Monte Carlo in June each year, where entrepreneurs from over 50 countries around the world compete for one of the most coveted global business awards.

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Entrepreneur Today

Empowering Township Entrepreneurs

Big drive to bring ideas to life in the townships this Global Entrepreneurship Week.





As part of Global Entrepreneurship Week, Experian teamed up with Rhiza Babuyile and Township Fleva – two organisations responsible for supporting township communities – to assist entrepreneurs in transforming their innovative ideas into thriving businesses.

The annual event ‘Tshogo’, which took place in Tembisa yesterday (Thursday, 15 November), is the culmination of roadshows in Gauteng’s populated townships, such as Diepsloot and Orange Farm. These involved up-and-coming start-ups pitching their business ideas to a panel of experienced judges, including Simon Rudman, Social Innovation Lead at Experian SA.

Twenty winners received funding to the combined value of R280 000 to kickstart their business venture, while our others received marketing packages to equip them – and their ventures – further.

“Throughout the competition we were greatly inspired by each and every one of the entrants. There is definitely no scarcity of bright ideas,” says Rudman. “By keeping our entrepreneurs top of mind and providing continuing support, we can grow the township economy for the greater good of the country.”

Experian is pleased to support Rhiza Babuyile, by providing the JoZi Business Hub participants with career counselling as well as credit and financial education aimed at empowering and equipping entrepreneurs with the financial know-how to manage and grow their business and to make smart credit decisions.

“We believe data has the power to transform lives and societies for the better and our corporate social responsibility programmes pioneer how we use our business skills, products and services to promote financial education, financial inclusion and support small business entrepreneurs.

Related: FNB Kicks-off Global Entrepreneurship Week By Engaging Township Entrepreneurs

“These engagements also provide a great opportunity for us to include the entrepreneurs in our solution development process. Their feedback is invaluable in helping to shape products which will hopefully contribute to their success”, adds Rudman.

Global Entrepreneurship Week is a celebration of innovators and job creators who launch start-ups that bring ideas to live and drive economic growth. The JoZI Business Hub’s Tshogo roadshow could not be a better example of this in action.

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Company Posts

Call For Applications: Young Entrepreneurs Global Exposure Trips

Closing Date: 30 November 2018

Investec Specialist Bank and Asset Management




Investec CSI’s Young Entrepreneurs Programme provides South African entrepreneurs from various sectors with global exposure.

Every year Investec, in partnership with En-novate, sends a group of young entrepreneurs from various sectors to specifically selected countries in order to gain global exposure. Each itinerary provides them with opportunities to network and engage with venture capitalists, funders and captains of their specific industry. The aim is for them to gain learning and exposure to innovation, technology and process advancements. The programme also offers networking with subject and sector experts.

Applications for the Global Exposure trips are now open to ALL entrepreneurs – regardless of sector – who meet the criteria. Closing date is Friday 30 November 2018.

Applications link:

The programme itinerary and each trip is customised according to the profiles of the candidates, stage of business and specific sector.

By way of example, Investec recently sent 14 entrepreneurs from South Africa to Berlin to meet people doing Out of the Ordinary things in textiles:

Related: En-novate Goes Toe-To-Toe With The Best In The World

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