It was Sunday, 28th June 2026, Lagos had a good measure of Rainfall, so much that the thirsty earth could not contain and it started flowing into any space it could find. Canals overflowed, likewise drainages; some homes got a share, little did I know that my small corner shop was not spared. When we resumed business on Monay 29th, we met the store still water-logged; my stock of safety boots and safety accessories (those on the lower wrung of the Shelve) were completely sub-merged. Often times in Lagos we hear news of burnt markets, affected traders cry blood, some degenerate into High Blood Pressure, some others are forced out of business due to the financial constraints occasioned by the loss to inferno. In some other instances, shops are burgled overnight and shop owner wakes up to the sad reality but with no support to cushion the impact of his loss. My Case was different: within the first week of opening my physical shop, I had secured an Insurance Cover from Mutual Benefit Assurance Plc. So, while my staff were bemoaning the situation sending videos and pictures, I joined in the grief but I remembered the move I made which many did not think was necessary; I reached out to my account manager at Mutual Benefit and he guided me on the necessary documentations and procedure to submit my claim. Whilst my exposure was not huge, I got adequate compensation: for an annual premium of NGN 34,446.75, I got compensation of N601,087.92. It was not in millions, but it was enough to cover the potential loss thereof.
Dealing with the Myths
Unfortunately, a lot more owners of Micro, Small and Medium Scale Enterprises (MSMEs) bear the risk of insurable losses alone even when there are provisions within the insurance business to cater for such risks while the business owner focuses on growing the business. Every time a businessman loses property or stock to an insurable risk, it is actually a victory of Myths over Realities; a victory created by ignorance, nurtured by past years of service failure in the industry; a victory too loud to be silenced by recent improvements in the industry. Reality is that insurance is here to help and the NAICOM (Nigeria Insurance Commission) has done a great job in sanitizing and stabilizing the industry. It is about time we dealt with the Myths so MSME owners can wake up to the reality; it is time we shunned the voice of ignorance and leapt to freedom; freedom over myths:
a). Insurance is (NOT) a Scam: Very early in my working career, I was schooled by my Boss that insurance IS NOT A SCAM. Every asset in the organisation was duly covered with an insurance policy and I saw firsthand, compensations paid in millions: stolen vehicles replaced by insurance; damaged vehicles fixed by insurance, burnt assets replaced by insurance; later in my career, I have also seen cash lost in transit and goods lost in transit replaced by insurance. Personally, my Vehicle was involved in two accidents last year and on both occasions Mutual benefit (my insurer) settled me because I have a comprehensive Motor Vehicle Insurance on my Vehicle. Dear fellow MSME owners, insurance is not a scam; it is a leverage you necessarily need, if you must sustain and scale your business. Determine to take up a policy today and protect yourself and your business.
b). The Claim Process is (NOT) Bureaucratic and Cumbersome: Not really. To manage the process, ensure you have appropriate documentation to establish the occurrence of the insured event. Have pictures and videos where possible that document the event. For stock-related claims, ensure you have stock records that can be relied upon to establish the extent of loss suffered. Keep purchase invoices to confirm addition to inventory. Preserve the damaged items for inspection by the Loss Adjuster before you commence repair or disposal. When all of these are given due care and attention, the claim process is made less cumbersome with more time saving. The experience and capacity of the insurer is also key; making a good choice helps take care of this concern. In my last experience, I had all my inventory tracked and updated using my little Zoho App (which cost me just a token monthly); with my Zoho App I was able to extract my inventory balance, cost and selling price in one single download. My purchase invoices were saved in my desktop folder as well as WhatsApp messages, making them readily available on request. In the event that some of these requested documents are not fully available, the insurers are flexible enough to find other ways of validating the claim. Truth is, the business owner needs to pay attention to transaction documentation and business records – these help eliminate the fear of a bureaucratic and cumbersome claim process.
c). Insurance is (NOT) expensive: Like it is being said in our local parlance, ‘prevention is better than cure’; suffice it to say that ‘insurance is cheaper than risk’. As a general estimate, to ensure stock worth NGN 5million costs less than NGN 50,000 in annual premium (less than 1% of the insured value). Yet, when a loss occurs, your compensation is limited to the insured value which far exceeds the annual premium payable. So, let not your argument against insuring your business be hinged on wrong perception about cost anymore. In my experience, mentioned earlier in this write up, Mutual Benefit Assurance Plc paid me NGN601,087.92 (six hundred and one thousand and eighty-seven thousand naira and ninety-two kobo). To earn this compensation, I paid an insurance premium of less than NGN 50,000. A simple cost benefit analysis shows I spent NGN 50,000 to save my business bottom line bleeding of over NGN 600,000. If I had failed to spend the NGN50,000, when the risk occurred, I would have dipped into my pocket to fetch NGN601,087.92 to restock the goods destroyed by the flood.
Get-off the Doubters’ Boat
The inertia of the average MSME owner towards insurance is in itself a business risk; one that typifies the adage of ‘sitting on a keg of gun powder’. The sad reality is that this gun powder does not grow cold or impotent with time, rather, its potency increases with every single hour the inertia continues. Insurance is not a scam; process of making claim is not necessarily cumbersome; getting insurance cover for your business is not expensive; it is a wise business decision you would never regret. Jump off the doubters’ boat, else you will cry alone in your closet when it happens. Events of loss do not give advance warning, they occur impromptu; your preparedness against such events is never a matter of smartness, prayer or carefulness; it is about having the right mitigation strategy, joining a safety net where your chance of recovery when the risk eventually occurs is guaranteed – this is what insurance affords. Be a calculated risk taker, do not gamble with your business. In all your getting, get wisdom (prov 4:7).
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