Creating a business can be tough, especially for single business owners. Whether you are organizing the legal aspects of your company or deciding what to invest in, it is important to prevent letting important tasks fall through the cracks.
To achieve this, we recommend creating a comprehensive risk management plan. What should be on the top of your list of risks to identify? Check out below!
1. Cyber threats
Cybercrimes can affect companies of all sizes. According to UPS Capital, a cyber breach can cost small companies approximately $148,000. Of those attacked, 60% of them fall out of business after six months. As technology advances and society becomes more “techy”, it is crucial for companies to protect all web and data connected devices and keep up with information technology security methods, such as installing cyber security software and backups, testing data security systems and procedures, creating a response plan and obtaining any necessary insurances.
2. Lost or damaged property
Imagine losing property you took months researching for or spent years paying. For small business owners, property holdings can be the largest costs or assets. Therefore, lost property or property damage can lead to a failed business. Business owners should list every available property they have and keep track of them. Obtaining property coverage may help owners recover from losses by providing the replacement costs or actual value.
3. Effecting the environment
Some industries have a higher chance to affect the environment than others. An environmental mishap can lead to a lawsuit. Identify all negative impacts your business may have towards the environment and ensure you have insurance coverage.
4. Employment practices
Did you know that 60% of employers will experience a lawsuit by a prospective, current or former employee? Once starting the interview process, employers can be accused of wrong doing, including unfair firing claims, sexual harassment and any other form of discrimination. Defending against these lawsuits can be costly for business owners. Thankfully, the Employment Practices Liability insurance is available to help employers afford to defend themselves.
Although consulting a legal firm may be expensive, it is worth the cost. Adequate legal counsel can point out any unsuspected risks and can save business owners in the long run. Evaluating each clause effectively and thoroughly will save any future legal and insurance costs.
6. Employee injuries
Identifying all potential health and safety hazards can be complicated. Some may be apparent with high risk while others completely unsuspecting to those untrained. What’s important to note is that any risk is a risk and can cost business owners an exuberant amount of money. Costs, such as lost production time, treatments or lawsuits, can shut down uninsured businesses. Businesses should frequently practice safety procedures and programs to decrease accidents, that will in turn reduce the severity of workers’ compensation claims.
7. Unexpected interruptions
This includes disruptions caused by natural disasters, your neighboring tenants, diseases, pests or even car accidents. The U.S. Department of Labor estimates that approximately, 40% of businesses shut down after experiencing a natural disaster. Adding Business Interruption coverage to your insurance can help mitigate this risk.
What’s important to remember is that although risk management may seem tedious, it will ultimately save businesses money and help prepare for the worst. If you need assistance deciding what policies you’ll need, the Insurance Solutions of America team is available to help!