Owning a business involves a complex set of challenges. It’s a great deal more involved than coming up with products or services that are in demand, marketing them and selling them to customers at a profit. Among the many other factors you need to address and mitigate are the many risks your business is exposed to on a daily basis.
What Are Risks?
“Risk” is an insurance term that has to do with uncertainty over the possibility of loss from a particular kind of accident, mistake or disaster for which insurance coverage is sought. For example, some businesses such as roofing, logging and construction carry a high level of risk due to the array of ways that employees and/or third parties can be injured on a job site.
Even sole proprietorship consulting firms are not immune from risk; injuries, errors and damage or theft can happen to anyone. Take a look at some of the most common risks to see if your company needs general liability or errors and omissions insurance quotes.
Data Breaches and Credit Card Fraud
If your business accepts payments via credit and debit cards as most do nowadays, you are definitely providing a service that most customers appreciate. However, you are also making yourself vulnerable to hacks and other forms of data breach in which criminals infiltrate your systems to snag sensitive customer data. The dawn of chip cards has reduced your chances of suffering financially from credit card security lapses, but the potential remains for difficulties in this area.
To be on the safe side, take steps to upgrade your systems to accept the new EMV chip cards, thereby removing the burden of liability from your shoulders should fraud or a breach occur. Furthermore, make sure you are in compliance with all Payment Card Industry Data Security Standards. Finally, consider purchasing cyber insurance to protect you against the costs involved in notifying customers of data breaches, card payment penalties, remediation and public relations.
Whether you work out of your home or own multiple buildings, your property is still subject to unanticipated damage from fire, storms, wind, floods and theft. Such catastrophes often mean that you are no longer able to run your operations for days, weeks or even months. Needless to say, this degree of business interruption can lead to devastating financial setbacks. Fortunately, you can take steps to lessen the severity of the blow.
Obtain enough general liability and business interruption coverage to tide you over after a large loss. While you may never need it, just one disaster will convince you of how invaluable such coverage can be. Combine solid insurance with preventive measures such as regular safety checks, staff trainings and drills and a comprehensive disaster recovery plan. Don’t wait until the unthinkable happens; by then it will be too late.
Risks From Employees and Customers
Whenever you have people working for you or individuals walking through your doors to purchase products and services, your business is put at risk. In spite of your best efforts, on-the-job accidents, illnesses and injuries can occur. Workers’ compensation coverage is a vital first step, but you may need more protection. Employment practices liability and management liability coverage will provide a safety net that protects you against claims of discrimination by past, present or future employees and outside individuals.
Mistakes and Omissions
If your business offers services for a fee to customers, manufactures products or gives advice or treatment, you or your employees may be accused of failing to perform as you advertised or of making a mistake that led to loss for the customer. As a result, you may be sued for a substantial amount with devastating financial consequences.
To minimize the impact of such a situation, errors and omissions insurance can pay for the costs of your defense and any settlements that arise up to the limits of your policy. Make sure to shop around and look at several errors and omissions insurance quotes in order to pick the one that is tailored to your unique needs.
No matter how careful you are, you can never totally eliminate risk. It is as much a part of your commercial life as it is of your personal one. However, safeguarding your valuable employees and investments against these potential dangers is preemptive action you can take that may prove invaluable. Do your research, shop around for the most comprehensive packages that meet your industry-specific needs and you can rest easy knowing that you have done all you can to minimize the effects of all types of risks.