As a small business owner positioned for growth, it’s ideal to be aware of the top small business risks so that you can be better prepared for them if they come your way.
We’ve researched the top 5 most common small business risks to be aware of as your business grows and succeeds.
Business interruption
Is your business prepared if a flood strikes tomorrow? Do you have a risk mitigation plan in place in the event of a fire? Does your insurance policy cover temporary relocation? These are all situations that can put your business at risk of incurring losses. Ask yourself: will my business be able to survive a disruption? In most cases you can’t prevent a natural disaster, but there are other ways to help protect your business. Consider adding business interruption insurance to your property insurance policy, which can cover operating expenses and lost income in the event something happens to your permanent business location.
Cyber security
The best companies today can afford the best defences, and as these larger enterprises get better at defending against cybercrime, cybercriminals are moving down the business food chain and targeting small businesses that cannot afford sophisticated security investments. Today, small businesses are the preferred targets for cybercriminals. When cash flow is limited, spending on security suffers and vulnerability increases. Obtaining cyber insurance, as well as taking preventative measures to reduce Internet-based exposures, can help you reduce the risk of becoming a target for cybercriminals.
Lack of legal expertise
Many first-time business owners may not have the expertise to evaluate every detail of each contract they have to sign or they may overlook something by mistake. These oversights, however, can lead to problems down the road.
Protecting your property
Many small businesses operate from a home office, and a home is often one of the biggest assets a small business owner owns. If you’re a small business owner with home insurance, know that most homeowners’ insurance policies don’t automatically cover business-related damages or losses that occur in a home office. You should consider small business property and general liability insurance to protect yourself against any business-related claims, such as slip and fall and theft. Conduct an audit of your assets to see how a loss might affect your business, and to assess what type of coverage you’ll need to repair your property and replace your possessions.
Liability losses
No matter what you do, you’re likely to incur a loss during your business’s lifetime. Unfortunately, there isn’t a fool-proof safety net around liability, but there is protection. Commercial General Liability (CGL) insurance provides coverage for damages that your business may be found to be legally liable for, which are typically caused by bodily injury or property damage to third parties, including when you and your staff are conducting business off-site.
Insurance is a key component of every business plan. By understanding the top small business risks threatening your success, you can take steps early on to manage them and help protect your property and possessions when disaster strikes.
® Northbridge Financial Corporation, licensed by Northbridge General Insurance Corporation (insurer of Northbridge Insurance policies).
