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Figuring Out the Best Way to Get Your Business Insured

StrategyDriven Risk Management Article | Figuring Out the Best Way to Get Your Business Insured

40 percent of businesses don’t reopen after a disaster. That’s the bad news.

The worst news? We’re in the middle of a disaster. The COVID-19 pandemic is taking the economy to the cleaners and leaving many small businesses on their death bed.

The good news? As a business owner, there are steps you can take to protect your business from foreseen and unforeseen disasters. One such step is to purchase adequate commercial insurance.

This sounds easy and straightforward, but it’s not. You must find out the best way to get your business insured; otherwise, you could end up underinsuring or even over-insuring your company.

Continue reading to learn how to go about insuring your business.

Identify and Assess Your Risks

Every business faces a wide range of risks.

Some risks affect all kinds of businesses regardless of their industry or niche, and others only affect certain types of businesses. For example, owners of medical practices face malpractice risk. Restaurants don’t face this kind of risk.

However, both businesses do face a fire risk. An electric fault can result in a fire that razes down the buildings that house both businesses.

As such, the first step to insuring your business adequately is to identify all the risks it faces. You can do this on your own or you can hire a risk assessment professional to help you.

If you’re hiring a professional, ensure they’ve got enough industry-specific experience. If you own a logging business, for example, an industry risk specialist is in a better position to identify logging insurance risks than a risk pro who specializes in the retail industry.

After identifying all your risks, assess their threat-level. Which risks pose a more imminent threat? Which ones are less likely to affect your business?

Next, what amount of damage is every risk likely to cause?

With a proper risk assessment, you’ll know the amount of coverage you need to protect your business.

Determine the Kind of Insurance Policies You Need

Wouldn’t it be awesome if insurance policies offered a blanket policy that covers all the risks your business faces?

Well, some large insurance companies offer customized policies, but it would rarely be a blanket policy. Also, there’s the general liability insurance policy that covers most of the risks your business faces, but it’s barely adequate on its own.

Yet, a common mistake small business owners make is purchasing general liability insurance and stopping there. Don’t make this mistake.

There are several other types of business insurance policies you should buy, depending on the nature of your business. Here are some of those policies:

Property Insurance

If you run a brick and mortar store and you own the building, purchase property insurance.

Your building faces a number of risks that can result in extensive damage. Fires and natural disasters, such as floods and windstorms, can destroy the building, forcing you to abandon it until repairs are made.

A property insurance cover will compensate you for the damage and other losses.

If you run a home-based business, you might want to add on to your homeowners’ insurance policy, so that it covers your commercial activities as well.

Business Interruption Insurance

You don’t need to look beyond the coronavirus to see how a disaster can disrupt your business operations.

During such times, business interruption insurance is your ally. Depending on the terms of coverage, the insurer should compensate you for the losses you make during the interruption period.

Workers’ Compensation Insurance

Do you have more than 3 employees?

In most states, that’s the requirement for purchasing workers’ compensation insurance. When an employee gets injured on the job, you won’t worry about compensating them for their medical expenses and other losses. Your workers’ comp provider will do that.

Cybersecurity Insurance

If your business has digitized some or all of its operations, it’s imperative to buy cybersecurity insurance.

43 percent of online attacks now target small businesses like yours, which means your risk level is high. A cybersecurity insurance policy will protect your business from the effects of an attack, including business interruption and data loss.

Other types of insurance you might need include product liability insurance and commercial vehicle insurance.

Find the Best Insurance Provider

You’ve probably heard horror stories of insurance companies that refuse to settle claims. If you don’t do your homework when looking for an insurance provider, you might end up telling such stories.

You want to work with a legitimate, reputable insurance company.

Read up online reviews about a specific insurance carrier before giving them your money. What are past and current clients saying about their service quality? Do they take forever to settle valid claims?

Also, you want to work with an insurance company that provides most, if not all, of the insurance policies your business needs. This way, you’ll be in a better position to negotiate for discounts when renewing your policies.

Consider Self-Insurance

Large corporations don’t typically purchase insurance from other companies. They self-insure, simply because they can afford to cover their risks from their deep wallets.

Self-insurance isn’t just for big companies, though. Even small businesses can develop a self-insurance plan, as long as you know how to go about it.

One effective way is to set up a captive insurance company. This is just like any other insurance firm, only that it is wholly owned by your parent business. You have complete control over its operations.

Get Your Business Insured the Right Way

Getting your business insured adequately can be a costly task, especially if you’re a small business running on a tight budget. However, it’s the right thing to do. Even a minor disaster can bring your business to its knees when you don’t have insurance.

With this guide, you now have the information you need to insure your business the right way.

Keep reading our blog for more business tips and advice.

The Most Dangerous Things for Businesses

StrategyDriven Risk Management Article | The Most Dangerous Things for Businesses | Business RiskIf you are in control of a business, no matter how large or how small it is, you likely have problems that keep you up at night. There will always be inherent risks to any business-owner, which typically runs proportionally to rewards; everybody knows that entrepreneurs take big risks by not being employees, but they do so because they anticipate a payoff. In business, you should be looking for ways to minimize inherent risk at every opportunity. Here are some of the most dangerous things for businesses.

Non-Paying Customers

The world of commerce is relatively simple: a customer buys a product by giving you money and leaves with a product in a simple exchange. Unfortunately, this is not how most business operates. Many business transactions involve large sums of money, and as a result, customers become more likely to complete a transaction over several payments instead of one lump sum.

Not everybody pays on time, however, and this isn’t an unusual encounter in the business world. However, problems arise when non-paying customers build up or when customers try to avoid paying altogether, as Donald Trump’s power asymmetry negotiation style is famous for. This can have a major impact on cash flow, which can decimate most businesses. When activist investors take over a company, one of the first things they do is call in any remaining debts to the company with the help of a good legal team.

Fires

A wise man once said that the rich should fear two things: gambling and fire. Fire has the potential to destroy any business, even one which isn’t physical — a fire in a server room can wipe out an entire online enterprise if the servers do not have backups. A glance at a list of businesses that were destroyed during a town’s fire in Tennessee in 2016 would send shivers down a small-business owner’s spine. Fires are impossible to completely prevent, but with regular fire protection inspections and, of course, good preventative measures like working carbon monoxide detectors can mitigate the risk massively.

Legal Action

A lawsuit can be an exceptionally damaging thing for a company to deal with, especially if the business is small. In America, lawsuits have become a very common part of dealing with competition, especially when a larger company is fending off a smaller competitor. In these business skirmishes, whoever is willing to spend the most money can often bankrupt their competitor, causing many small companies to pay special warning to cease and desists from larger businesses.

Legal action can also be completely justified if you have, through negligence, committed a fault that can put an employee or customer in harm’s way. This is especially dangerous for companies that do not have a good vetting process for their managerial employees, as a bad mistake from a managerial representative of a small business could cause a lawsuit that could bankrupt the business completely.

Preventative measures hence become incredibly important. They ensure that all employees and business operations adhere strictly to legal guidelines; also, health and safety procedures can be the difference between a healthy, long-lasting business and a business with good prospects that made a mistake and went bust.

5 Key Fire Safety Measures for Small Businesses

StrategyDriven Risk Management Article | 5 Key Fire Safety Measures for Small BusinessesIf you’re a fledgling business owner or are in the early stages of setting up premises for a new venture, one aspect you are likely not thinking about a lot is fire safety. Starting a new business requires a hefty amount of thought and planning, but most of that will be focused on acquiring customers, financial planning, marketing strategies, overheads, and so on.

Once you’re up and running, ensuring that the bricks and mortar of your small business are physically and financially protected from fire is essential. Below are five safety measures to implement as a small business.

Identify Fire Hazards

The importance of a fire risk assessment cannot be underestimated. According to the National Fire Protection Association (NFPA), there are roughly 37,000 fires on manufacturing and industrial properties every year in the US, resulting in nearly $1 billion in damages. The first place to start when conducting a risk assessment is to evaluate any fire hazards around the facility, such as electrical hazards or combustible and flammable materials. It is also a good idea to review all areas of the office and consider how fires may start because of surrounding materials.

Identify People at Risk

Once you’ve identified potentially hazardous areas or materials, you will also need to evaluate any people who are more at risk during a fire. For example, do you employ anyone who may be visually or physically impaired? Or do you have people whose roles put them at additional risk to fire than others? Identifying these people means you’re able to put secure plans in place should a fire strike.

Invest in Fire Protection Services and Products

It goes without saying that installing the necessary fire protection products around the office is a necessity. Items such as fire extinguishers, fire sprinklers, alarms, emergency lighting, and the like will all need to be evaluated and installed. If you are unsure about how to go about this, try consulting experts at a fire protection services company like APFE.

Plan and Practice a Fire Exit Strategy

Every business or office should have a sound fire exit strategy and this should be practiced regularly. All employees need to be aware of the main exit points and what is expected in the event of an alarm. The Occupational Safety and Health Administration (OSHA) require all companies to have evacuation maps and visual communication so that staff can quickly refer to guidance if needed. Facilities are also required to have two exit points and paths that are clearly identified.

Train Staff in Fire Awareness and Safety

Creating a fire safety plan for your business is not enough. You will need to train your employees so that they clearly understand the risks of a fire, how they can prevent fires, and what they need to do during an emergency. As fire safety training is a legal requirement, there are various fire safety eLearning modules that your staff can complete online at any time.

The risk of fires is a very real and serious matter to consider when setting up and running a business. To ensure that you and your staff are safe, refer to the above tips and take the necessary precautions. Otherwise, the danger to life and financial consequences for your business could be huge.

Is Your Business A Target For Criminals?

To answer the question of the title simply, it should be stated that: yes, businesses are more at risk of being targeted by criminals than private citizens and public sector entities. This is simply because it’s assumed there is more of value to take from a business. As such, we’re going to look at the major criminal risks facing your business and how to make sure that you’re protected.

Theft

If you have any physical assets of worth, be they retail goods, business equipment, or digital hardware, then there is a real risk of theft. Investing in the physical protection that you need is crucial. Smart CCTV systems linked up to digital alarm systems can help you spot and act on signs of theft as early as possible. Ensure that you’re protecting against internal loss caused by theft from employees, as well. Use an inventory management system to ensure you track every asset and know where it is located at all times and who has access to it. For higher value assets, consider using GPS trackers so that, even if stolen, you can track them down and get them returned in more cases.

Fraud

For businesses that conduct any kind of high-value transactions, there is always the risk of fraud. Thankfully, there are a lot of ways to protect yourself from it, as well. Ensure you safeguard access to any financial accounts, by making sure that they require multiple layers of authentication to access and by doing employee background checks to make sure you’re not being targeted by career criminals. Investigation software can help you make better use of the reams of data that modern businesses tend to have to deal with, making it easier to find the facts behind a case of fraud. Lastly, make sure that you invest in fraud protection insurance so that any costs you do accrue can at least be recouped.

Cybercrime

More and more businesses are relying on increasing levels of digital technology, meaning that we tend to store more valuable data on digital systems and also need them to carry out core business functions. As such, preventing hacking attempts is crucial. Make sure you work with a digital security expert to find and close vulnerabilities in all your hardware, software, and networks. Teach your employees the importance of good cybersecurity practices such as password security and never leaving their terminals open and accessible to anyone who might find it. One of the latest threats, ransomware, also shows the importance of investing in enterprise-strength anti-malware software. There is a digital threat race ongoing, and you need to be continually improving your defenses to make sure you don’t get left behind.

Assume that your business is at risk of being targeted by criminals, then figure out what those risks are and make sure that you’re doing what you can to protect against them. Whether it’s theft, cybercrime, fraud, or otherwise, you can’t let your business stay vulnerable. Complete your risk assessment and find what kind of protections you must invest in.

How To File A Lawsuit In A Business Disagreement

StrategyDriven Risk Management Article | How To File A Lawsuit In A Business DisagreementAre you having a business disagreement with another business or individual? Have you tried everything you can to resolve the issue, but without any success? If so, the next option may be to file a civil lawsuit.

This may seem like an extreme option, but in reality, civil lawsuits are fairly common. In fact, over 40 million civil lawsuits are filed every year in the USA, and there are over a million lawyers to help deal with the lawsuit process.

So if you need to file a lawsuit, you’re not alone – but it is important to make sure you know what you’re doing before you get started.

Here’s everything you need to know about filing a lawsuit in a business disagreement.

Who Is The Defendant?

Is the defendant a business, an individual, or both? It is important to know who you are filing a civil lawsuit against before you do it, as it can help to determine the amount you could win. It can also help you to decide if it is worth it; generally, it is much easier to file a lawsuit against an individual, but if you have a strong case and a good attorney, you can certainly win against a business.

What Do You Expect To Get From The Proceedings?

Filing a civil lawsuit comes with legal fees and court costs. If these costs are more expensive than the amount you hope to win, it may not be worth pursuing the case – but if you could stand to win big, you may wish to continue. So take some time to think about how much the individual/business cost you, and then compare this cost to the court fees.

Is The Defendant Harming Your Business?

If they are harming your business, you will need solid proof, such as an expert witness or video footage of the harm they cause. Without this proof, it will be difficult to win in court, so take some time to gather up evidence and witnesses before filing a claim.

What You Need To Do: Hire An Attorney

The first thing you should do is speak to an attorney about your case. They will be able to review your case and decide if you should proceed, and they can also represent you in court. We suggest finding an attorney who has experience in the specific area you are dealing with (such as employment law or contract law).

Contact The Correct Jurisdiction

Once you have weighed up your options and gathered evidence, you can contact the right jurisdiction. This often depends on where the event took place, and it can also depend on the type of case. For instance, you may need to speak to a small claims jurisdiction or exclusive jurisdiction. You can find out more about these options by contacting your local court for more information.

Write A Demand Letter

Once you have contacted jurisdiction, you can write a demand letter. This letter will explain your case and how you want to be reimbursed, and this will be reviewed by both the defendant and the court. Once the letter is written, you can fill in court forms and register the claim (which normally costs money).

Set A Date With Court

Next, the defendant will be served with the demand letter and a date to appear in court, and then they have some time to decide how they want to proceed. For instance, they may want to build a defense, but they may also decide to settle out of court.