Top Major Business Risks That You Don’t Expect and How to Manage or Get Insurance
The joy and rewards of owning a business can overshadow the risks that come with running a company. So you got your business up and running, sales is going up, but are you prepared for unexpected risks?
There are different types of business risks that can negatively affect the business and potentially destroy everything you’ve worked hard for. These risks can be time-consuming and expensive.
Get Insurance for the Unexpected Risks at Low Cost Before the Problem Kills Your Business
To know more about how to handle different types of business risks and how get insurance, wner, you can always avoid these risks by anticipating the problem. By taking the right steps and identifying the risks, business owners are more equipped to handle various situations.
As a business owner, you can always avoid these risks by anticipating the problem. By taking the right steps and identifying the risks, business owners are more equipped to handle various situations.
What Is the Biggest Asset of Your Business?………..It’s YOU
Most business think that their most valuable asset of their business are sales, equipment or customers, but they forget themselves often.
What happen if YOU, as a business got sick or disabled? You cannot run the business and for some small companies it can be devastating.
Who is going to pay for the expenses and payroll if you can not get back to work? A Life Insurance, Critical Illness insurance or even a Business Operation Expenses Insurance can help you.
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What Is a Business Risk and How This Can Ruin Your Business?
To understand better, a business risk refers to any situation that can possibly threaten the business from reaching its financial goals. Business risks can be due to a number of factors that can be caused within the company or externally.
It can threaten the company’s ability to provide sufficient returns to the owners, stakeholders, and investors. Even though no one may completely protect their business from problems, creating a plan or strategy to help prevent this can go a long way.
Once this happens, the business becomes exposed to financial risk, systematic risk, and liquidity risks. Hence, it is important for owners to be able to minimize the risks and be prepared for it even before it happens. Professional risk analysts can help calculate the risks.
Different Types of Unexpected Business Risks
- Damage to Property — This type of business risk pertains to the business property’s physical location including its contents. In case the property was damaged by natural disasters or other external factors, would you be able to pay for the costs incurred? Purchasing a business owner’s insurance policy can help protect your business from property damage. This policy includes property coverage which can help pay to fix the damages incurred in the company’s physical location. This insurance covers stolen or damaged property. Make sure you make an inventory of your business property including the office supplies and furniture.
- Injuries incurred during the business — If an or employee gets injured while conducting business with you and you become liable for it, your business may be faced with medical expenses and expensive legal fees. A workers’ compensation insurance can protect your company in case an employee has an accident and gets hurt while performing their job. An insurance coverage can protect you financially. It covers the costs of the accident including the medical expenses.
- Business is interrupted — An insurance policy can help support the costs in case your business is forced to temporarily relocate or close while the repairs are being done. A business interruption insurance which can be a part of a business owner’s insurance policy can help replace lost income or pay for expenses. There are certain events that are covered by a business owner’s insurance include theft, fire, wind, lightning or falling objects.
This policy provides coverage in case your business is unable to operate due to a covered event. The insurance takes care of the fixed expenses including the rent, mortgage, employee salaries, and lost income.
How to Get Prepared and Avoid These Business Risks
While companies may not entirely avoid business risks, especially since risks are often unpredictable. On the other hand, there are ways for business owners to reduce the risks by identifying the risks and preparing for it. Here are some of the steps business owners can follow to avoid potential risks from harming their business. When your company is well-prepared, you can significantly reduce the impact on your business, especially when it affects your income and time.
- Identify the risks — One of the most important steps business owners can take is to identify any potential threats to the business. This includes both internal or external factors that may affect the business. When identifying potential risks, you can scale it based on how likely it may happen. An extensive analysis can help business owners plan, strategize, and decide.
- Be proactive — Waiting for the risk to manifest before doing anything is one of the worst mistakes business owners can make. By taking action immediately before any of these risks happen is a huge step in preventing potential problems from taking place.
- Take note of the risks — After you’ve identified the potential risks that can harm your business, make sure you list down all the important factors, especially in case the same situation happens again. A record can be significantly helpful when making plans for risk prevention.
Coming up with a strategy can help the company navigate the ups and downs and help prepare business owners better. Unexpected situations can damage the business, especially if you don’t have any plans on how to prevent and mage the situation. The external risks may include the weather, economy, and interest rates which are all out of your control.
Getting a Business Life Insurance is NOT Costly and It Can Create Wealth for You!
Did you know that inside a life insurance Cash Value will be created? Cash Value?? Yes, that is money that you can access when you need it from the life insurance. You are not just paying premiums, but also building up money inside this life insurance
Purchasing a business life insurance is a practical way to manage risks of the business owners.
When companies are insuring their businesses against risks, the type of coverage and the extent of it will most likely depend on the nature of the business. A manufacturing plant, for example, requires more coverage for its employees compared to an administrative office.
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Preventing Risks
The best way to handle risks is to prevent it from happening. The most practical ways include getting insurance, conducting employee training, emergency training, safety procedures, and equipment maintenance. Plans should be in place to protect your business from fire, explosion, and hazardous environment.
At the same time, employees should be trained on how to react in case an accident occurs and be knowledgeable about what to do following the accident. A safety plan should be set in place. All potential risks should be covered and addressed. Meanwhile, business owners should also update their insurance policies from time to time.
Common Types of Physical Risks
- Building
This is the most common type of risk and the most likely damages to a building are fire and explosion. In order to effectively manage building risks, employers should follow certain steps. Employees should be aware and know all the location emergency exits.
Install smoke detectors, fire alarms, and sprinkler systems for extra protection. Your employee safety should be your number one priority.
- Location
There are several location hazards that may potential risks to a business including fires, storm, hurricane, tornado, earthquake, floods, and natural disasters. Therefore, it is important for all employees to be familiar with the streets and the neighborhood.
- Hazardous material
This type of risk refers to hazardous materials that are often released into a workplace environment including gas, acid, toxic fumes, toxic dust, and poisonous liquids. Employees who are often exposed to these hazardous materials should be properly trained and equipped in handling these toxins safely.
Businesses should always have a solid emergency plan on how to handle the impact and effects of these risks. The fire department and government agencies can provide more information on how to prevent, minimize, and control this type of accidents should it occur.
- Technology
The most common type of technology risk is a power outage. Power generators are often used as a reliable back-up system for electrical energy used for various functions. Most manufacturing plants use generators to keep the business operations until the power is fully restored.
Power surges may happen during storms or even at random times. Therefore, businesses should always be prepared to back their systems up with devices to prevent loss of important documents. An online and offline data back-up should be set in place to protect and recover critical files and documents. On the other hand, if the communication and telephone line break down, the company should be ready with an emergency cellphone as a back-up.
The Bottom Line
Dealing with business risks may prove to be detrimental to your business. However, there are various steps you can take as a business owner so that you can minimize the damage. Getting an insurance policy to protect your business is one of the best things you can do for your company.
Most types of risks can potentially destroy the business you’ve worked so hard to build. It can cause serious damage as well as incur costly repairs which may drain your business finances and savings. One situation may negatively affect your business, especially when you are unprepared.
Therefore, one of the things a business owner should, especially when setting up the company is to identify potential threats to their company. By doing so, you can save time and money by being prepared in case a potential risk threatens your business. At the same time, you can focus on more important things such as running your business instead of worrying about it.
