Business owners are used to taking risks; however, with the right small business insurance policies in place, you can limit the types of risks that lead to significant financial damages. The risks business owners face can be internal, such infrastructure, personnel, process, or technology issues, as well as external, such as political, economic, or environmental forces. It’s important to consider what would happen to your business in the event of a natural disaster, a wrongful termination suit, or even a minor fender-bender in a company car.
By completing a proper risk assessment, you can spot where the vulnerabilities lay in your operations and with the proper insurance in place, limit financial damages. Essentially, you need to examine the likelihood of certain events, and the potential financial hit your business could take if it occurred.
Six Key Elements of Small Business Risk Management
- Potential for third-party injury claims from customers or clients. If a client slips on a wet floor in your waiting room, spraining their ankle, you would be considered liable in the event a lawsuit is filed for medical bills or other damages. Is it possible that a non-employee could be injured while visiting your business?
- Services provided and use of contractual agreements. If you or one of your employees fails to complete a job as specified by a signed contract, you could be liable for any damages accrued by the client or customer. Consider what it would cost your business if a service isn’t performed correctly.
- Your employees. Unless you are the only employee, you need to consider the likelihood of an employee-related lawsuit, which could include claims of discrimination, sexual harassment, or wrongful termination, all of which can lead to major financial damages. (Note: Worker’s Compensation, which is required by law, does not cover these types of claims.)
- Access to third-party or client data. Data breaches are of growing concern for today’s business owner. Think about what would happen if a hacker got into your computer systems. What data could they access, including passwords or sensitive client information?
- Company car policy. If an employee gets into an accident while driving a company-owned car, the company, not the employee is liable. If you have a company car, you’ll also want to consider how many people use it, how far they drive and how often.
- Location and equipment. Is your business located in a flood prone area? Are you in a historic district, which may increase your risk for fire damage if your business, or another nearby establishment, catches fire? Do you own the equipment in your office and are therefore liable to replace it in the event it is damaged?
Brunswick Companies’ Risk Management Services
Many business owners struggle to properly assess their risk on their own. At Brunswick Companies, our Risk Management Consultants can help evaluate your needs and make sure you are protected with policies that can reduce your risk and limit potential damages to your company.
Whether your business is just getting off the ground, or well established, make sure you regularly consult your insurance agent about new risks and new vulnerabilities. Contact Brunswick Companies today at 800-686-8080 to learn more about our services for small business risk assessment.