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Kudzai Chikiwa, Business Reporter
INFORMAL traders have been advised to insure their assets and stock to guarantee compensation and prevent losses in the event of disasters, experts have said.

Reacting to the recent fire incident that destroyed Unity Village, one of Bulawayo’s biggest flea markets, Zimnat Insurance head of sales and business development, Mr Willard Gadziwa, said the loss of property by operators, while being unfortunate, was a signal for informal traders to have insurance cover as a mechanism to manage risk.

“The recent fire, which gutted down Bulawayo’s biggest flea market, Unity Village, resulting in property worth thousands of dollars being lost was very unfortunate and caused untold suffering. Although the fire was regrettable, it has also highlighted the need for business people, especially those in the informal sector to have insurance as a mechanism to manage risks,’’ he said.

The affected traders told Business Chronicle that their stock at Unity Village was not insured and that they were now having challenges restocking as they had no compensation and most of them had no other sources of capital.

Only the building was insured under Old Mutual and renovations were already underway. During the visit to the premises, Zesa workers were already taking quotations on site preparing for repairs.

Mr Gadziwa said under stock insurance policy, the trader’s stock is covered in the event that the insured inventory is stolen, damaged or destroyed by insured perils include fire, lightning and explosions among others. The cost of the policy varies depending on the replacement value of stock insured, he said.

Mr Gadziwa explained that insurance operates on the basic understanding that risks are ever present in life and that losses and setbacks occur from time to time unexpectedly. As such, every business person should be prepared for such unfortunate incidents.

“Most losses are inevitable and there is need for business people especially those in the informal sector to have insurance as a mechanism to manage risks. There are a number of insurance products that can be offered to the informal sector but perhaps one of the most important is one that ensures stock is adequately covered,’’ he said.

Mr Gadziwa said besides providing insurance solutions, most insurance companies now offer comprehensive risk management services, which assist businesses to understand risks better without necessarily buying insurance.

Good risk management practices mitigate the occurrence of losses and definitely reduce the cost of insurance, he said.

Another insurance analyst, Mr Taurai Museka said most informal traders make a blunder of focusing on the perceived high cost of securing insurance rather than the terms of insurance and compensation they receive after a loss.

“When informal traders hear of insurance they think of a very expensive commodity without considering that after heavy losses, insurance help them restore their stock.

“If you calculate the money they use to buy food during lunch time per month, the amount even exceeds insurance premiums needed. This is just a sign of ignorance and these traders need to be educated on the validity of insurance especially in times of such loss at Unity Village,’’ he said.

Insurance does not only reimburse people when they suffer loss or their property is damaged but also helps businesses and individuals resume their normal business operations and standards of lives respectively, which also benefits the whole society and the Government in revenue creation, said the experts.

“In a world filled with uncertainties insurance helps us to have a peace of mind,” said Mr Museka. — @tamary98.