Source: Christopher Griner
Predicting the full effect of the human, economic and geopolitical consequences of this global COVID-19 pandemic is impossible. Adapting to the so-called “new normal” is the only way to survive.
We have all suffered immediate and considerable operational challenges because of the pandemic, to which we have had to quickly adapt. The question that arises is, what the impact will be in the medium and longer term? How will growth prospects and profitability be affected?
You may have put in place mitigating policies and practices to ensure continued profitable growth, and they will carry you through this pandemic and lockdown turmoil. What you may have forgotten to do, however, is to sit down with your broker to take a serious look at your insurance portfolio – and adapt your insurance programme to the “new” business you now run.
Insurance reflects the realities of your business, as its exposures are what you need to mitigate and manage. Therefore, if you have done any of the following and not changed your policy and cover, you are probably now incorrectly insured:
- Incorporated automation, and digital and innovative technology into your business.
- Adapted or changed your security, both physical and electronic.
- Built any new structures or applied new machinery.
- Changed your mechanisation programme.
- Employed or laid off staff.
- Changed your distribution model and channel.
- Made changes to your vehicle fleet.
- Added another income stream (such as a home industry).
- Closed down an income stream (such as a guesthouse).
- Changed your business form (sole proprietor to trust or company).
This is by no means a comprehensive list, but it will give you an indication of how wide the spectrum of issues can be that influence your insurance needs.
Acting quickly is something any businessperson needs to do in the face of adversity. You need to develop adequate contingency plans for your business and position your business to deal with these challenges.
Importantly, you also need to position your business for when the crisis subsides. Especially in these turbulent times, it is important to emphasise employee morale and ensure they are mentally and physically healthy.
A few years ago, when farmworkers in the Western Cape set farm equipment and assets alight amid labour disputes, many farmers were caught unprepared – they had never thought of taking out SASRIA cover for the property on the farm. They had only insured their vehicles against unrest because they never believed it would happen on their own properties.
In the present situation, you may have found that the horse has already bolted in the same way. Potentially you could have insured some of the challenges that you currently face, but you did not because it would never happen. Or so you had thought.
Nobody is clairvoyant and nobody can predict the future, but COVID-19 has clearly illustrated that things can and will change very quickly under the right circumstances.
Your challenges around logistics and the movement of produce, keeping the product in the market and retaining your markets are key to your long-term strategy. So what is the worst-case scenario you can possibly imagine?
Do the same with every part of your business and operations, and your personal property and household. Then sit down with your broker, share these scenarios, and challenge them to find solutions.
The truth is that your broker may not come up with solutions for all the scenarios you have sketched, but the exercise will be worth both your while. You then have choices that you can evaluate for their cost effectiveness and value proposition.
You may be surprised at the available solutions, and how they can also assist in improving your management processes and occupational and health practices.
That’s what great insurance should always be about and at Hollard, that’s our focus. Our business purpose is called Better Futures, and it promises that everything we do (and how we do it) should create and secure better futures for more people.
If you’re a farmer and you’ve pivoted your business to face COVID-19, but not your insurance cover, speak to your broker today. It’s how you, too, can create better futures not only for your business but the people who depend on it. – Andries Wiese, Head of Agri, Hollard Insure.
This blog is an adaptation of an article published recently in Farmer’s Weekly.
