Why Broadform Liability Cover is Essential for Small Businesses

Did you know that Broadform Liability Insurance is one of the most critical protections a small business can have? Yet it’s often overlooked until it’s too late. From customer injuries to third-party property or even product damage, just one unexpected incident can lead to expensive legal claims that threaten your entire operation. First for Women offers specialised Broadform Liability Insurance for small businesses like yours, giving you the financial protection and peace of mind to focus on growth.

Why small businesses are the backbone of South Africa

Small businesses are the heartbeat of South Africa’s economy. According to the Small Enterprise Development Agency (SEDA), as of the third quarter of 2022, there were approximately 2.68 million small, medium, and micro enterprises (SMMEs) in South Africa, marking an 11.6% increase from the previous year. In a country with one of the highest unemployment rates globally, the role of SMMEs in economic stability and job creation cannot be understated.

Economic growth and job creation:

SMME businesses are especially important in bridging the gap between formal and informal economic activity, and their success has an ongoing effect, supporting families, stabilising communities, and contributing to reducing isolation due to financial hardship. Every successful township butcher, construction startup, or digital consultancy means more food on the table for households and greater hope for future generations.

Innovation and diversification:

In contrast to large corporations that typically control established sectors, small businesses tend to thrive in emerging, niche, or underserved markets. This entrepreneurial spirit promotes economic diversification, which is essential in reducing the county’s reliance on traditional industries such as agriculture and mining. South Africa’s small businesses are also contributing to regional trade and international partnerships, especially within BRICS nations.

With less red tape, small business owners are agile and responsive, quick to innovate, adopt new technologies, and offer products and services tailored to local needs. These initiatives lay the foundations for entirely new industries to emerge.

Community building and social cohesion:

SMMEs are pillars of their communities - whether it’s a woman running her hair and nail salon in Soweto or a family-run café in Stellenbosch, these enterprises provide more than just employment; they offer spaces for connection, inclusion, and support.

In rural and peri-urban areas, where big businesses can rarely be found, small businesses are the primary economic engines. They keep money circulating within communities, reduce the need for migration to cities, and build resilience against economic changes.

Economic empowerment and inclusivity:

Small businesses are also a beacon for empowerment and transformation. Under Broad-Based Black Economic Empowerment (B-BBEE) policies, many are owned and operated by Black South Africans and women, two groups historically marginalised in the economy. By supporting the growth of small businesses, South Africa moves closer to a more inclusive economy where wealth creation is broader and evenly distributed. According to the Department of Small Business Development, supporting SMMEs is one of the key strategies for achieving equitable growth.

Challenges that threaten SMME business security

Despite their considerable contributions, small businesses face significant challenges. Crime, limited access to finance, poor infrastructure, and regulatory red tape are everyday roadblocks. Many entrepreneurs lack formal training in areas such as compliance, financial management, and marketing, factors that can impact long-term growth.

One of the biggest concerns, however, is business risk. Whether a customer injury occurs on-site or accidental property damage during service delivery, unexpected incidents can devastate a small business financially. Many operate on thin margins, meaning just one legal claim or public liability incident could shut operations down for good.

Products like Broadform Liability and Small Business Insurance help to empower women in business by protecting their reputations and ventures.

6 reasons why small businesses should have Broadform Liability Insurance

Broadform Liability Insurance cover offers essential protection against risks that could otherwise threaten your operations or damage your reputation. Here are six reasons why it’s worth investing in this type of insurance:

1. Protects against third-party claims

If a client suffers damages due to your service, they could sue. The Public Liability Insurance component of your  Broadform Liability Insurance policy covers third-party injury or property damage claims, helping you avoid severe out-of-pocket payouts.

Scenario: A customer slips on a tile floor at your grocery store and sues for medical expenses. Your insurance steps in to cover the claim.

2. Covers legal defence costs

Court cases are expensive. Legal defence costs – including attorney fees and court expenses – can drain your bank account. This policy absorbs those costs so that your business isn’t left financially vulnerable.

Scenario: A client sues your consultancy for providing allegedly incorrect advice. Even if you’re found not at fault, your policy covers your defence.

3. Safeguards business reputation

Fast claim resolution can help to limit negative publicity and maintain customer trust. Without insurance, disputes can drag on, damaging your brand. This insurance cover ensures claims are handled professionally and quickly.

4. Meets client and contract requirements

Corporate clients and government contracts often require proof of insurance, including cover such as Public and Product liability Insurance as is relevant to the company. Having Broadform Liability Insurance in place can thus make your business eligible for bigger opportunities and reduce red tape.

5. Provides coverage beyond premises

Whether you’re visiting clients or working offsite, accidents can happen anywhere and at any time. Your insurance travels with you, offering protection wherever your business operates

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6. Helps ensure business continuity

A single claim shouldn’t mean the end of your business. Broadform Liability Insurance allows you to stay focused on the day-to-day operations, while your insurer manages the financial and legal fallout of any claim.

Get a First for Women Insurance quote

Don’t let unexpected incidents put your small business at risk. Get a personalised First for Women Insurance quote for Broadform Liability Insurance today. Our team is here to answer any questions you may have.