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Business Insurance: How to Protect Your Business From Risks and Liabilities in Nigeria

27/03/20246 minute read
Business Insurance - How To Protect Your Business From Risks And Liabilities In Nigeria

Most Nigerians shy away from being business owners because of the risks and hazards associated with them. As a business owner, you’re open to many opportunities and risks.

As a new business owner or one with a business that has been on for a while, protecting the business you have worked hard for is essential. Knowing your legal liabilities and shielding your business against risk and Liabilities will be important.

With a competitive entrepreneurial spirit, there are ways to help protect your company from risks and Liabilities in Nigeria.

1. Point out Areas Prone To Risks and Liabilities

The very first step to protecting your business from risks and Liabilities is to identify the actual risks and liabilities in your business. Once you’re able to identify these risks and take proper steps toward protecting your business, you’ll greatly reduce the likelihood of being at risk.

Some of the liabilities that occur in businesses include:

  • Fall accidents.
  • Accidents that involve company vehicles.
  • Fire or any temporary damage caused by your business.

Every risk has a financial impact on any business. Hence, taking the necessary steps to protect your business from risks and liabilities is essential.

2. Have a Business Entity

Creating a business entity will give you a solid foundation with your asset-protection plan, especially in a country like Nigeria. It helps give your business that entity structure with backup protection. The structure helps establish your business as a distinguished legal entity that may help you protect your business from risks and liabilities in Nigeria.

As a business owner, you don’t just have to create a business entity, but you should also work towards maintaining it.

Make it a habit to regularly check your mail, emails, and phone calls. Important information about your business cannot be missed.

3. Execute Sanitation Procedures

No one wants to get sick due to poor hygiene. To make it even worse, I don’t think you’ll want any of your employees to get sick on your watch. Although sometimes you can’t help when it’s flu season, you can prevent outbreaks and sicknesses that are quite controllable.

Do you serve food and drinks to your employees and visitors? Then, you must ensure that perishables are stored adequately to prevent spoilage. Also, make sure hand sanitizer stations at different stations are working and refilled regularly.

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Have a cleaning crew that works efficiently. In life-threatening cases such as a pandemic, ensure that your business premises are temporarily shut down, discharge your workers, and enact work-from-home policies.

4. Procure Business Insurance to Reduce Exposure

When it comes to business, no one can ever be too careful. Business insurance is available for different business needs.

Every business in Nigeria needs insurance, from a small business to a large corporation.

What is Business Insurance?

Business Insurance is a form of insurance that protects businesses from financial losses that are associated with unexpected happenings, damage to property, lawsuits, employee injuries and illnesses, theft, etc. So, in cases of injury or any form of damage, your business insurance covers the cost by repaying your company either fully or in part.

You should think of business insurance as backup protection for your business needs in Nigeria.

Types of Business Insurance

  • Commercial Property Insurance

This type of business insurance covers damage to your business property, either caused by fire, storm, or any events relating to the property, depending on the policy. Flooding usually requires extra coverage.

A few types of commercial property Insurance include Business income, commercial auto, business personal property, and home-based business insurance.

  • Liability  Insurance

Liability insurance in Nigeria provides legal liability coverage for every possible way your business could be sued. This coverage includes bodily injury, damage to property caused by your company ( and not damage done to your company’s property), employment practices, errors, etc.

Commercial umbrella, professional liability insurance, directors, and officers are all examples of liability insurance.

  •  Employee Insurance

Every business in Nigeria needs business insurance policies. Therefore, business owners shouldn’t consider them irrelevant.

Disability insurance can either be short or long-term. The company usually provides short-term disability insurance, while long-term disability is mostly reserved for wealthy individuals or secured by the country.

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This kind of business insurance can cover injuries that majorly end up in getting more time off work. It could also cover for injuries and illnesses that occur outside of work premises.

5. Keep Your Documentation Safe

As a business owner in Nigeria, knowing that you’ll face risks should be your reality. Even though it’s nearly impossible to have control over or avoid all risks, it’s possible to protect your business from future hazards. One of the ways to get this done is by keeping your documentation safe for reference purposes.

You need to keep safe documentation of contracts, invoices, employee records, and customer information. This paperwork should not be misplaced at any point because it is so important to your business.

There are a few steps you can take to keep your documentation safe and protect your business from risks and liabilities in Nigeria. Place all important documents relating to your business in a locked cabinet. Encrypt electronic documents to easily deny access to them by unauthorized personnel. Lastly, make sure you carefully shred documents that are no longer needed, so they can’t be used against you.

6. Have a Business Attorney

The significance of having a business attorney cannot be overemphasized as a business owner in Nigeria. While business insurance can cover your company from risks and liabilities, there are others that only a business attorney can handle.

A good business attorney can help you avoid legal problems you are completely unaware of. They can also help you with policies and procedures that will protect your business from risks and potential liabilities.

By doing this, you can then fully focus on running your business successfully and leave the legal aspect to the professionals because that’s their job. If you can employ the services of a business attorney, then go ahead by all means.

The Bottom Line

Business insurance can be seen as a backup protection for any business needs. You can’t possibly avoid all the risks, but you can protect your business from risks and liabilities in Nigeria with the guide above.

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