With the 2010 World Cup on the horizon, guesthouses are popping up and offering employment to many South Africans. Across the board, tourism is offering opportunities for small businesses, but being in the people industry can be tough as events beyond your control can affect tourist perceptions. Unexpected events can also force the business to close down temporarily, losing bucketloads of income.
According to Edward Gibbens, executive head of Broker Distribution at Santam, these industries are vulnerable to a host of liability claims, so Santam has attempted to provide for anything that could possibly go wrong.
For example, ski resort Tiffendell was temporarily closed down several years ago owing to an unprecedented snowfall. Guests were unable to leave and new arrivals unable to access the resort. The cost to the business was enormous, but today things like adverse weather conditions can be insured against.
According to Mark Rothmann, manager of property underwriting at Santam, hotels, guesthouses and other tourist businesses can take out insurance to protect against a range of income-depleting incidences. When starting your tourism business, you need to consider the range of events that could have serious implications for your business and make sure you are covered.
For example, an oil spill off the coast of Cape Town could result in a mass of cancellations by tourists wanting to holiday in the city. Shark attacks or attacks by wild animals on a game farm can also cause tourists to think twice about their visit.
A tourist operator can even insure against food poisoning and other liabilities. On a game farm, a rampant rhino charging through the gate and destroying the neighbour’s Land Rover can be costly. Apart from liability insurance, game animals themselves can be insured should a kudu land up in a head-on collision on the highway.
Rothmann says personal liability can also cover false arrest should your security guard mistake a guest for a thief. Day-to-day accidents resulting in damage to a guest’s property or the theft of guest’s belongings, also needs to be insured. Cover is also available if a tourism business is shut down owing to an outbreak of vermin, a disease in the area or even the suicide of one of the guests.
Particularly important for Cape Town tourism is that most policies also cover for damage or loss of income as a result of electricity failure.
Tourism cover could also include insurance on the owner’s personal effects, even down to the koi fish at the entrance of the premises. Anything that impacts on the establishment’s attractiveness, such as a storm that has left the garden ravaged, can also affect income, and cover needs to be considered.