Small business insurance South Africa protects the assets of your business, income, and property. This protection is to prevent and protect your business from unexpected financial losses. When you get small business insurance, it will also help you to cover expenses from circumstances that occur during business operations.
What qualifies for a Small business insurance requirements in South Africa
In South Africa, if your business can qualify as a small business corporation (SBC) if the following criteria can be in accordance with the South African Revenue Service (SARS):
- The annual turnover of the business should be less than R20 million
- All the shareholders of the business must be natural people
- The business cannot have ownership of any other business
- Twenty per cent of the income should come from personal services
- Less than twenty per cent should come from investment income
The business that qualifies as SBC can benefit from decreased corporate taxes and increased depreciation. It will also benefit from immunity from Secondary Tax on Companies (STC) and Skills Development Levies (SDL).
Businesses can receive these benefits by including in their income tax return that they are SBCs (ITR14). In doing this, reduced rates will automatically apply.
In South Africa business are primarily categorised as big or small depending on the number of employees.
- Micro: 0 to 4 employees
- Very small – 5 to 9 employees
- Small – 10 to 49 employees
- Medium – 50 to 200 employees
What does Small Business Insurance Cover?
As a business owner you will face a wide range of risks that can destroy your company. Small business insurance South Africa covers a wide range of risks and areas that will protect your business. Some of them consist of:
- Financial Losses
- Theft
- Fraud
- Law Suits
- Property Damage
- Business Interruption
- Cyber threats
- Employee risks
- Liability Claims
What insurance do i need for a small business
In order to claim small business insurance South Africa it depends on what your company does and the state you are in. This will give you the type of business coverage you need.
If you fail to have the right type of small business insurance, you will be in situations where you pay out of pocket for claims. Many businesses do not have resources or the capital to cover claims.
This means they may not be able to overcome challenging circumstances. This is why small business insurance is a crucial investment for shielding your company against such problems.
If you are wondering what insurance do I need for a small business, here are some of the most common types of small business insurances:
- General Liability Insurance
- Professional Liability Insurance
- Business Income Coverage
- Commercial property Insurance
- Workers’ Compensation Insurance
- Commercial Auto Insurance
- Data Breach Insurance
- Commercial Umbrella Insurance
- Employment Practices Liability Insurance
- Business Owner’s Policy (BOP)
- Hazard Insurance
The Best Insurance Companies in South Africa for Small Businesses
According to the Small Medium Enterprises (SME) claiming small business insurance South Africa is highly important. It offers a tremendous amount of benefits. Some of the best insurance companies in South Africa are as follows:
- AIG Business Insurance
- Budget Business Insurance
- First for Women Small Business Insurance
- MiWay Business Insurance
- Santam Insurance
In choosing one of these insurance companies to protect your business from unforeseen events you will gain:
- Experience
- Expertise
- Wide Coverage
- Customised Solutions
- Risk Management Support
- Competitive Pricing
- Value Added Services
Small business insurance prices in South Africa
After qualifying for small business insurance South Africa, you may be wondering how much does small business insurance cost in SA? This cost will also vary depending on the size of your business. Some the general prices include:
- R249 per month, with loss and damage cover up to R35,000 and liability up to R150,000
- R349 per month, with loss and damage cover up to R50,000 and liability up to R250,000
- R499 per month, with loss and damage cover up to R100,000 and liability up to R500,000
Conclusion
Insurance is needed for your small enterprise is to protect ventures from unexpected risks. Securing the right coverage, small business can make sure the financial stability and adhere to legal requirements.
It will also help you to promote long-term growth and success in a market that is highly competitive. Investing in a good insurance policy is crucial.
A policy customised to meet the needs of your business will prevent potential loss to your company. And help you focus innovation and expansion.
Key Points
- Small business insurance in South Africa protects your assets, income, and property from unexpected financial losses.
- To qualify as a Small Business Corporation (SBC), your business must have an annual turnover of less than R20 million and meet other criteria set by SARS.
- We categorize small businesses by employee numbers: Micro (0-4), Very Small (5-9), Small (10-49), and Medium (50-200).
- Common small business insurance types include General Liability, Professional Liability, Business Income Coverage, and Commercial Property Insurance.
- Insurance costs vary, with plans starting from R249 per month for basic coverage and liability.
- SBCs benefit from decreased corporate taxes, increased depreciation, and immunity from Secondary Tax on Companies (STC) and Skills Development Levies (SDL).
FAQs
How much is insurance for a small business in South Africa?
Before you decide what insurance policy best suits your company, you should know all your options. Generally business insurance will usually cost around R3000 per month. However, this varies and will depend on the size of your business.
Is employer liability insurance compulsory in South Africa?
It is a statutory requirement to give workman compensation for business that has employees in South Africa. For injuries that are work related, it covers employee claims which also include occupational diseases.
Is insurance compulsory in South Africa?
No. Insurance is not a compulsory requisite for all businesses in South Africa. However, certain types of insurance may be required depending on the type of business. Some of the compulsory insurance is: vehicle insurance, workers compensation insurance, professional insurance, public liability insurance…etc.
How to register a small business in South Africa?
You must register online. The CIPC website can be used to register your company. Once you register as a CIPC customer, you have access to their transactional portal. You can then register your company through the ‘New Companies’ tab.
Can a foreigner register a business in South Africa?
Yes, a foreigner can register their business in South Africa. If they possess a valid passport that is issued by their country of resident, they are able to register. It should be noted, for directors and shareholders in any South African company, there are no nationality requirements.