Your small business is a big part of your life. While you likely purchase insurance to keep your company safe, a variety of other risks may bring your organization to a standstill. With an effective risk management strategy, you protect your company today while planning for the future.
As a small business owner, you likely think more about meeting the demands of your customers than managing risks. After all, your primary focus is on growing a successful company. Still, failing to account for certain risks may be a recipe for disaster. Here are five risks every small business owner must identify and address:
1. The loss of critical personnel
Generally, people are more important in small businesses than in large organizations. That is, your customers or clients may rely on you specifically. If you or another key person leaves your company, your customers may depart, too. As such, you likely want to address the loss of critical personnel in your risk management plan.
2. Employee injuries
You no doubt understand the importance of having a safe worksite. Of course, you probably cannot eliminate the chances of employee injury entirely. Because job-related injuries can affect your company’s bottom line, you must have a plan for paying for injuries.
3. Property damage
Natural disasters, fires and criminal activity can destroy your small business’s assets. When planning to address risks, you have to think about property damage. Be sure to purchase sufficient insurance to cover your building, warehouse, inventory and other assets.
4. Employee liability
If one of your employees injures someone else, you may find your small business in the middle of a costly lawsuit. Still, you likely rely on delivery drivers, warehouse workers and others for your day-to-day operations. Rather than hoping for the best, develop a strategy for addressing employee liability.
5. Business interruption
While you may have insurance that pays for you to rebuild your company after a disaster, it may not provide coverage for lost business and income. Therefore, you may want to consider adding business interruption protection to your overall risk management plan.
There is nothing wrong with paying attention to the demands of your customers. You should not, however, forget to manage risk. With a bit of effort and some foresight, you can likely ensure your company is in a position to assist your customers for years to come.
