Small Business Owner’s Guide to Risk Protection
Only large, multi-national corporations must worry about risk management, right? Wrong. You might run a small business, but its size doesn’t mean you won’t face hazards that could permanently close its doors.
From accidents to natural disasters to lawsuits, risks lurk around every corner, inside and outside your company. However, you can help safeguard your business with the right commercial insurance.
What Is Commercial Insurance?
Commercial insurance, also known as business insurance, provides you, your employees, and your company with a financial safeguard against risks and potential losses.
The risks can come from outside and within your business and include property damage from a flood, a liability claim for an injury, or a criminal organization hacking customer and employee files. Commercial insurance can provide a financial safeguard from the impact of these and other unexpected events.
Risk Management for Small Businesses
As a small business owner, you face many risks. Your business structure — sole proprietor, limited liability partnership, or limited liability company — can safeguard you against some risks. However, you need commercial insurance to feel comfortable that your risks are covered.
Consider taking these three steps toward risk management:
Identify and assess potential risks
Implement preventive measures
Insure against risks and hazards
Establishing this risk management plan can allow you to track and measure your progress in mitigating the risks to your business.
Potential Risks Your Business May Face
Whether they come from within or without, risks can keep your business from running smoothly and growing. Here are the types of risks you may be up against daily in your business:
Financial
Operational
Strategic
Compliance
Legal
Human resources
Technological
Environmental
Reputational
You must develop a risk management plan, put internal controls in place, create a business continuity plan, inspect and maintain your property and products, and engage your employees in risk management. A commercial insurance agent can help you build the right insurance coverage into your plan.
Types of Commercial Insurance
The federal government requires you to purchase insurance for workers’ compensation, unemployment, and disability. Depending on the state you operate in, you might have other requirements for insurance, so check your state’s website to keep your business in compliance.
You can call a commercial insurance agency to find additional coverages you might need.
Commercial General Liability
This coverage can protect your business against a claim for property damage or bodily injury.
Commercial Property Insurance
A policy that can safeguard your inventory, buildings, and other commercial property from loss or damage.
Commercial Auto Insurance
Your company may be covered if a company vehicle is damaged or causes injury or damage.
Professional Liability
The coverage may safeguard your business against faulty work, claims of negligence, unlawful employment practices, and mismanagement of company assets.
Crime Insurance
Your company may be able to recoup losses from theft, fraud, employee dishonesty, or other crimes.
Business Owners Policy
A customized policy that includes commercial property insurance, commercial general liability insurance, and other commercial insurance you might need.
Clarify the Best Risk Protection Measures With an Insurance Professional
A discussion with a commercial insurance agent can help you match the right coverage to the risks of your business.