The rewards of small business ownership can come with their share of risks. Some accidents or theft, for example, can lead to lost revenue, legal liabilities and big headaches. Fortunately, you can help protect your company by identifying potential risks and taking steps to prepare for them. Here’s a look at five business risks and how you can help minimize the consequences.
What would happen if your business’s property — its physical location and its contents — were damaged or destroyed by fire or a natural disaster? Could you afford to make repairs or rebuild?
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RISK #2: BUSINESS INTERRUPTION
Many small business owners don’t think about what they’d do if a disaster, such as a tornado or fire, makes their business location uninhabitable, says the Insurance Information Institute (III). It’s important to have a plan in place in case you’re forced to temporarily relocate or close while repairs are made.
RISK #3: INJURIES AT YOUR BUSINESS
If a customer or visitor is injured at your business, and you’re found liable, your business could be on the hook for court costs, medical expenses or legal fees.
RISK #4: PROFESSIONAL LIABILITY If your business provides services or advice to clients, your company may face the risk of lawsuits stemming from things like alleged negligence or providing inaccurate advice.
- How to prepare your business: You may want to consider investing in professional liability insurance, sometimes referred to as errors and omissions insurance or even miscellaneous professional liability. If a client holds you responsible for any losses they incurred based on the advice or services that your business supplied, this coverage may help protect you. It may also help cover legal fees or other costs stemming from judgments or settlements against you.
RISK #5: DATA BREACHES
In today’s digital world, businesses may be at risk for having their company data stolen.
- How to prepare your business: Consider investing time and resources into securing networks, using firewall software and encrypting data, recommends the Federal Communications Commission. Also, take time to train employees on information security and require password protection on all accounts to help protect the company’s data. Additionally, you may want to consider adding data compromise coverage to your business insurance policy. Data compromise coverage, sometimes called data breach liability insurance, can help your business recover after a data breach. It helps pay for things like legal fees or credit monitoring for customers, if needed.
Having the right insurance coverage can help protect your company against common business risks. If you have questions about what kind of coverage is right for your business, consider contacting a local agent for help.