CMA Participates in the SMEs Exhibition to Introduce Insurance Products

Al Rashdi: Insurance is a key requirement for risk management of any enterprise

Al Harrasi: Enterprises are exposed to risk impairing their continuation and production

The Capital Market Authority represented by the Directorate General of Insurance Supervision participates in the Small and Medium Enterprises Exhibition at the Oman Exhibition Centre under the theme “ Enterprises Financing, Insurance and Risk Management” which continues until today 20 May 2015.  CMA will introduce the key insurance products SME’s entrepreneurs need. In the following  lines we will talk about the importance of insurance for the owners of SMEs and key insurance products they need.

Rashid Mohammed Al Rashdi, Director of the Department of Insurance Requirements and Licensing said:  CMA is aware  of the importance of furnishing  appropriate investment environment for the SME entrepreneurs to encourage the initiatives of the Omani youth to boost the development. He added insurance is one of the key requirements for risk management which is inherent to building any institution.

Al Rashdi said that insurance indicators show that the indemnities paid in 2014 to cover the risks of various institutions were 45% of the total claims paid in the same year which is evidence that  insuring the enterprises and employees is necessary. He added the Omani insurance market  has many conventional and Takaful insurance products.

Ahmed Al Harrasi, Insurance Auditor talked about the importance of insurance and key insurance products for SME entrepreneurs  adding that  all enterprises are exposed to many risks that may impact their continuation and  production. There are risks to properties, liability of employees and toward third parties, fires which could damage properties and buildings or injuries to employees while working. Products or services of the enterprise may cause damage to third parties leading to unexpected financial obligations  on the enterprise affecting the profit or loss which could result in production stoppage and end of the project. Al Harrasi said insurance products provide  prevention and safety from such risks and wealth maintenance to ensure continuity of production.

He added that the key insurance products is insurance against fire as fire risks are many and are covered by property insurance which were about RO 18 million last year. The insurance cover fire and lightening  and extends to cover human and natural risks such as explosions, riots, malicious acts, third party vehicle collision, earthquakes, floods, cyclones,  volcanoes, robberies accompanies by force and loss of earnings due to fires.

Then he talked about goods insurance provided by insurers for the products of marine insurance which paid RO 3 million in claims in 2014 covering goods transported by sea, air or land for the  risks to such goods and indemnification of owners for loss during transport until arrival to their destinations.

Ahmed Al Harrasi also talked about workers’ insurance policies, work injuries and group health insurance.

He said the employer is legally and ethically liable toward the employees of the enterprise specially where the worker sustains work bodily injury which require treatment in hospital or in the case of death and repatriation of the corpse to the home country of the worker

Insurance companies provide insurance services some are legal obligation such as insurance against work injuries, employees insurance and health insurance which cover medical treatment and hospital costs. Providing safety and peace of mind for employees boots productivity and profitability of the enterprise.

Al Harrasi tackled insurance of commercial vehicles  as many enterprises have commercial vehicles which are exposed to traffic accidents, theft, fire and third party damage. There is also the engineering insurance which is type of property insurance providing coverage for enterprises, machinery and equipment.

He added engineering insurance is divided into contractors’ risks while executing construction and engineering projects such as roads and buildings and third party damage to properties and lives or damage to plant and machinery or the material at the work site.  There is also installation risks covering  all heavy machinery such as construction equipment, damage to properties and third parties or traffic accidents,  machinery breakdown risks which is very important for plants and enterprises which depend on specific machinery and equipment. They also cover loss of earnings due to business interruption resulting from machinery breakdown.

Al Harrasi also talked about liability insurance which is an insurance service against the risks the enterprise is exposed to due to liability toward third parties resulting from the products such as damage to heath or property or professional liability. Liability policies are four covering damage to third parties while at the site of the work or near it these are general liability policies and policies covering liability toward third parties and their properties resulting from the products of the enterprise  which are called product liability policies. The third type is professional liability insurance policy and the last type is the employers liability policy against the risks to employees and injuries during work.

The insurance specialists have asserted that procuring insurance products provides stability and peace of mind for entrepreneurs  which boost their confidence in their endeavor to achieve success for their businesses.