In our last article, we gave an introduction to one of the most essential principles of business ownership: risk management. We detailed the importance of learning to mitigate risks as early as possible as a business owner.
There are many possibilities for problems to occur while managing business assets and employees. Some of these occurrences are more common than others – and it would be wise for small business owners to make sure they are caught up to speed before they find themselves in a sticky situation. This article lists the 5 most common risks that small business owners come across, and gives guidance on how to best utilize commercial insurance as a risk management tool in each situation.
- Building projects: In the early stages of a brick and mortar business, ongoing building projects will be common. Any construction project comes with a fair amount of associated risk. Before signing contracts for building projects, assure that you understand what your insurance does and does not cover in case of an accident involving damage or injury. Review your contracts thoroughly to understand what all parties are owed, and to assure that builders are properly reimbursed.
- Injury: In these cases, commercial liability insurance is an essential investment. Whether an employee is injured on the job, or they are responsible for accidentally injuring a customer, it’s important to protect the business against incoming lawsuits and to have a plan in place to pay for injuries.
- Data breaches: At this point, almost every business has a digital presence of some kind. Having your business’s data stolen can bring a slew of consequences that are hard to patch up without losing a lot of time and money. More than ever, it’s important to train employees on proper information security practices. Make use of data encryption services and firewalls as added protection against digital dangers.
- Professional service errors: There is a common misconception that totally sound practices and a well-trained staff make your business completely lawsuit-proof. Legal situations can occur at any time – and even misplaced allegations can cost a business time and money. This should especially concern service providers (such as web developers and CPAs), whose continuous customer support role offers a lot of room for misinterpretation on the client’s end that may incline them to take legal action.
- International manufacturing: Finally, many small businesses encounter early conflicts with international vendors whom they task with manufacturing their product(s). If something goes wrong overseas, it’s much more difficult to communicate the problem and find a quick solution. Business interruption insurance can help mitigate the risks that come with international supply chain problems.
Having a solid idea of what your business should do in each of these common situations will prove invaluable as part of your small business’s risk management strategy. In our final article in this series, we’ll provide a useful five-step process to managing risks.
For more information about risk management, the Superior Insurance and Auto Tags team is here to help. We understand that small business owners wear many hats, and we aim to be a reliable source of helpful information to you every step of the way. We offer a wide range of coverage options at attractive rates, for businesses and beyond. Visit our website or give us a call today to speak with one of our representatives.
