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Common Business Risks and Sure Ways to Avoid Them
The benefits of owning a small business brings with it its fair share of risks. Phenomena such as accidents, natural disasters and theft can necessitate serious loss of money, bring liabilities in the legal form and heavy strains. All hope is not lost though as you protect your enterprise by identifying those risks and taking steps to cushion their effects.
We shall therefore take a look at top five risks associated with businesses and the things you can do minimize the outcomes of the risks.
- Business Interruption: incidents such as fire outbreak and other events that are unforeseen can necessitate the closure or relocation of a business.
- Solution: To avoid the occurrence of the above incident, a disaster recovery plan has to be created. It will include data backup and recovery strategies and very important too, plans on how to actively set up a remote location and get employees abreast of the situation. It is advised that you invest in business interruption insurance. The essence is that it helps covering your operating costs and loss of income so you that keep paying employees while you replace equipment and repair damage. This protection is special because it provides reimbursement for up to a whole year of lost revenue.
- Property loss. Just as properties at home insured and covered, your business property also needs protection from the unexpected
- Solution: you are expected to audit your physical locations and business processes so as to identify places and areas that you are vulnerable. This requires that you seriously consider investing in a business owners’ policy to enable you cover any damages to company or business assets that results from fire, storms and other disasters. It should be noted that these policies are available whether the building you work in is rented or owned by you.
- Injuries sustained during work can result in medical treatment costs and reduction in productivity. Business insurance premiums can also be inflated.
- Solution: proper sensitization on workplace safety should be carried out for the employees. More so, proper workers’ compensation coverage should in place. The essentiality of this coverage is felt in the fact it provides wage replacement and medical benefits to staff that are injured on the job. In addition, it shields businesses from legal complications associated with workplace accidents.
- When issues such as accidental injury, libel or slander or the likes arise as unanticipated results of day-to-day business, business enterprises are at risk of lawsuits.
- Solution: events and occurrences that are unexpected and probably not factored in can come despite the fact that the business is well planned. It can however mitigate risks but it does remove it totally. It is therefore important to get general, product and professional liability policies. They offer coverage for unexpected third party insurance claims. Your insurance agent can advise on the kind of liability insurance your business requires.
- Security breach. Cyber attack can instantly cripple a business because of loss of data.
- Solution: As a consequence of the essentiality of internet and digital aspect of any business in our current dispensation. A good strategy must be mapped out to protect data both on-site and remotely. You are advised to invest in data compromise and identity recovery insurance especially if would be hard to recover from data loss. This can assist in covering against loss or damage to computer equipment, devices that store data, electronic information, software and expenditure related to data recovery. Talk to your insurance agent.
Got something to say about the business risks to avoid written above? kindly use the comment section.