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Welcome back to another DID YOU KNOW? where we breakdown everything business and finance simply for SMEs to understand.  In this three-part miniseries, we focus on the legal side of your small business so that you are protected from services providers, corporates, government (tenders), and supply chain suppliers.  No matter what business you are running every entrepreneur needs to have basic legal knowledge.

Let’s recap on Part 1 where we discussed the three main types of contracts available to small business owners and explained what they do. In part 2 we will look at Commercial law and what exactly it is used for with regards to small businesses.  Sit back, relax, and get ready to be schooled in the art of business law that will make you a formidable entrepreneur when it comes to knowing your rights as a small business owner in South Africa. Whether you are small or medium, working in any profession, you should be protected from others who would find ways to be dishonest.

We have broken it down into three different categories:

  • Contractual Law
  • Commercial Law
  • Intellectual Property Law


During the middle ages, Italy was the cradle of many modern institutions based on commercial law. Around the 16th century, the trade of Italian maritime republics was the promoter of the birth of commercial law: Benvenuto Stracca, (Ancona, 1509 – 1579) was one of the first, if not the first, legal imprint dealing specifically with commercial law. This treatise focused on merchants and merchant contracts, practices, and maritime rights, to which he soon added extensive discussions of bankruptcy, factors and commissions, third party transfers, and insurance. For this reason, Stracca is often considered the father of commercial law and author of the first Italian treaty about the insurance contract, beyond the commerce.

The legal work of Italian jurists had an impact on Holland, Germany, England, and France. Commercial law includes within its compass such titles as principal and agent; carriage by land and sea; merchant shipping; guarantee; marine, fire, life, and accident insurance; bills of exchange, negotiable instruments, contracts, and partnership. Many of these categories fall within financial law, an aspect of Commercial law pertaining specifically to financing and the financial markets.

What is commercial law?

Commercial law, also known as mercantile law or trade law, is the body of law that applies to the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising trade, and sales. It is often considered to be a branch of civil law and deals with issues of both private and public law.

When it is used?

In a civilised society, laws are there to keep us safe and protect our rights. The term Safe covers a myriad of terms when it comes to the law. Safe from harm, fraud, exploitation, and injustices. Laws differ around the world but impact us all to some degree. Commercial law regulates the conduct of people, merchants, and businesses who are engaged with trade, sales, and commerce, including e-commerce. It is one of the most important legal areas for businesses of any size. If this doesn’t apply to you then commercial law will still affect you as it covers consumer protection.

Why should you use it?

Commercial law impacts many aspects of your day-to-day life, which is why it’s so important to know about it. It covers everything from the shipping of goods, guarantees, fire, life and accident insurance, advertising, starting (or closing) a business, and consumer complaints. All business will have certain obligations to fulfill – this will include things like if a refund is needed and how that will be processed, without a set of clearly defined terms, businesses open themselves up to lawsuits.

All small businesses need to make sure that when they are selling a product or services that they are protected from customers and suppliers and that is why insurance was created to make sure that you cover not just yourself but your business and its assets as well. I will list the different types of insurances you can use as well.

Different Types of Business Insurance

  • Physical Assets
    • Whether a business owns or leases its space, short term content insurance is a must. This covers equipment, signage, inventory, and furniture in the event of a fire, storm, or theft.
  • Commercial Vehicle
    • If company vehicles will be used, those vehicles should be fully insured to protect businesses against liability in the event of an accident. At the very least, businesses should insure against third-party injury, but comprehensive insurance will cover that vehicle in an accident, as well.
  • Property Insurance
    • Property insurance protects the premises against loss or damage. You could opt for a product that also insure the property of others in your control at the time of the loss.
  • Liability Insurance
    • Take out liability insurance to protect the business when sued for negligence. This could be, for example, when an employee on duty or suffers an injury while visiting the business or when someone is impacted negatively by your employees or goods while in transit.
  • Theft Insurance
    • This covers your business’s stock and equipment in the event of a robbery or hold-up.
  • Travel Insurance
    • If your employees are going to travel frequently as part of their job, some sort of travel insurance needs to be provided by the business.
  • Business Interruption Insurance
    • If a disaster or catastrophic event does occur, a business’s operations will likely be interrupted. During this time, your business will suffer from lost income due to your staff’s inability to work in the office, manufacture products, or make sales calls. This type of insurance is especially applicable to companies that require a physical location to do business, such as retail stores. Business interruption insurance compensates a business for its lost income during these events.

All of the above-mentioned insurances is how small business owners can protect themselves from a financial aspect of commercial law so owners must protect their tangible assets in making sure that it can be replaced or upgraded in case of unforeseen circumstances as is the case of doing business.

List of Top 7 Insurance Companies in South African

  • Santam Insurance
  • Hollard Insurance
  • Standard Bank Insurance
  • Clientele Life Insurance
  • OUTsurance
  • MiWay Insurance
  • Discovery Life

For additional insurance companies click here:

Then you have all the terms and conditions, privacy, Impressum, disclaimers, and personal data which are populated for your social media accounts, website, e-mail, and press releases that play an important role where commercial law is concerned because this is the first port of call the law systems provide to all business owners and private citizens when they are in legal battles with other entities or customers

We have come to the end of part 2 of this three-part miniseries and would like to express the following thought – South Africa has one of the best law systems in Africa and the world but we cannot seem to use it the way it was intended due to multiple reasons.  When it does work for a person or business there is a stigma attached to it so let’s do it right from the very beginning by putting the necessary steps in place to protect you, your business, and your family from any unforeseen danger, stay tuned and stay informed until next time.

Yvette Pugin

Yvette Pugin


A force to be reckoned with: Qualified Senior Bookkeeper with 40 years experience in Administration, both in Corporate and the SME space. Having started working in the 1980’s when computers were still a dream; her experience was gained with manual systems. After working with SME Suppliers in the corporate environment, it became apparent that there is a need for not only education, but system management for SME’s.