David Cribb | Jan 17, 2024
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You get all the benefits and advantages of being a small or medium-sized business owner, and you also carry the burden of risks. Regardless of the type of business or industry you are in, there are two ways to mitigate them – by proactively taking steps to prevent or reduce them and by purchasing the right business insurance policies.
In this article, we’ll give you a rundown of five common business risks and some action steps for mitigating them.
Imagine worrying about your business all night after excessive winds did massive damage to buildings in the area where your business is located. The following morning’s inspection told you that it would be impossible for your business to remain open without making some major, expensive repairs. You’re faced with the choice of closing up shop altogether or relocating the business elsewhere temporarily. Chances are you’d lay awake several more nights thinking about how much revenue you could lose.
While you can’t control the wrath of Mother Nature, you can protect your business by purchasing business interruption insurance which is generally part of a business owners policy (BOP).
Business interruption insurance covers losses due to wind, fire, lightning, theft, and a shutdown due to actions by a civil authority. It supplements your business income enabling you to take care of the following expenses:
Cyberattacks are a looming threat for businesses. According to a 2023 press release by Deloitte, just under half of executives said they expected the size and number of cyberattacks targeting their financial and accounting systems to increase moving forward.
Take proactive steps to bolster your cybersecurity systems and keep your software updated. Provide cyber-awareness training for employees and require them to use strong passwords.
Beyond taking extra measures to protect your systems, it’s wise to invest in cyber liability insurance which comes in the following two forms:
Cyber insurance covers the costs associated with responding to cyberattacks and recovering from them.
Any day of the week a visitor or innocent bystander could become injured at your business, causing them to file a lawsuit against your company for medical expenses. An employee may cause property damage to someone else creating a liability concern.
To be proactive about preventing lawsuits, walk through your business operations, look for safety hazards that could lead to an injury, and address them immediately.
Nevertheless, accidents sometimes happen. A commercial general liability policy or a business owners policy will protect your company against claims of bodily injury or property damage. These types of commercial policies will also pay for the business’s court costs and legal fees.
Consider the types of tools and equipment located at your place of business that your business couldn’t operate without. If a fire breaks out or tools and equipment get stolen, you may have to cease operations while you replace them.
You can be proactive by creating an inventory of your company’s property which will become important in the event of a loss. Record equipment, tools, furniture, office equipment, office supplies, and any other necessary business equipment to keep your business running. Be sure to update your list regularly.
Business interruption insurance will cover the costs to keep the business running, but it won’t pay to replace your equipment. Business equipment coverage is the right type of insurance to replace your stolen or damaged tools and equipment.
Any business that provides services or advice to clients for a fee is at risk of professional negligence. If you give a client wrong information or leave something out, they could allege that you’ve harmed them or their business.
Something practical you can do to prevent professional liability risks is to write contracts that clearly define the services or advice you will provide. Also, be clear about the scope of work you will provide.
Professional liability insurance is also known as errors and omissions insurance. This type of policy covers you for professional negligence or mistakes, even if the claims are unsubstantiated. Professional liability insurance will also help cover court costs and legal fees in the event of a lawsuit. It will also pay for judgments or settlements up to the policy limit.
Your business risks are unique, and a licensed commercial insurance agent can review your company’s risk profile to help you select the best insurance policies. The commercial insurance agents at the Leap Carpenter Kemps Insurance Agency will also suggest ways to minimize and mitigate risks to prevent claims.
To get a quote on your commercial insurance needs, contact one of our agents at 209-384-0727 today.
For business owners in the commercial world, finding the perfect insurance coverage goes beyond simply chasing the lowest premium. When you invest in insurance, you're investing in a vital partnership that provides you with invaluable service and expert advice. However, not all insurance agents are cut from the same cloth. Some exclusively represent a single carrier, while others, like independent insurance agents, offer a broad spectrum of options tailored to commercial needs.
To safeguard your business's success, it's paramount to collaborate with a seasoned agent who comprehends the intricacies of the carrier market. This agent will be dedicated to establishing a personal rapport with you and crafting customized solutions designed specifically for your commercial enterprise.
Don't miss out on this opportunity to make informed decisions for your business. Download our free eBook now: "Stop Bidding Your Commercial Insurance and Find Your Ideal Partner."
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