Will insurance protect me?

June 2011 Security Services & Risk Management, Retail (Industry)

Insurance will return some or all of the money lost, but it will not support your future business.

“I would rather buy a cheaper cash acceptor under a fully insured service contract and save the additional R1000 a month of a more robust safe,” said a cost conscious franchise owner. “It does not matter if they blow it away. I am protected because the service provider will pay.”

On two separate occasions in as many weeks, I have heard this statement being made to the franchisor’s safety and security expert, whose responsibility includes providing professional guidance to his franchise owners and operators based on his expert knowledge and considerable experience. Like them, I shudder to think of the consequences of this ill-informed philosophy.

The very first principle of security is to deter the criminal from committing the crime in the first place. This becomes even more relevant when considering the protection of retail cash where it is common knowledge that around 40 violent attacks are executed every day by armed criminal gangs against South African business premises, in pursuit of cash.

If the cash is left in the till drawers, stored in an uncategorised box or low level safe or as is so often the case, in the bottom drawer of the manager’s desk, it is an easy and attractive target for robbery. And given that how we protect the cash is common knowledge to everyone in the store and that the vast majority of attacks occur with the help of insider information, be assured that there is very little to stop or discourage an attack.

Insurance will not stop the attack. Insurance will not prevent the trauma that our loyal staff and customers will experience. Insurance will not reduce the potential for serious injury and even death as a consequence and insurance will not protect our business from the sudden and sustained drop-off in trade arising from the subconscious aversion we all have to being around what we perceive to be a highly dangerous place.

An effective retail cash management solution is one that has a proven record in all three of the basic security principles – it makes the target so difficult to reach that the criminal is deterred in the first place; It deflects the criminal to rather try his luck at a softer and easier target; finally and if all else fails, it defends the cash and contains collateral damage as far as is practically possible.

Insurance is a non negotiable part of the complete solution, but it is really there to ensure that financial damage to both the customer and the service provider can be contained.

The extra R1000 may pale into insignificance when compared to the safety and security it can actually buy.

Richard Phillips is a cash logistics and security specialist and the managing director of Cash Connect Management Solutions, a leading solutions provider to the retail and wholesale market.

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