Insuring Against Small Business Risks

Video Highlights:

00:05 An optimistic attitude is a must-have for any business owner. But planning only for “best-case scenarios” can lead you into trouble. A single unfortunate incident can take away all you’ve worked to build. A fire…a flood…a wrongful termination lawsuit….an employee injury....the list goes on.

00:49 A well-designed risk management program is key to the long-term security of your business. And this often comes down to having the proper insurance coverage for specific risks.

01:00 Let’s start with insuring against property loss. As a first step, you should inventory your property assets.

01:24 Now let’s talk about a related issue: business interruption. If your facility becomes temporarily unusable, you would ideally move to a temporary location during repairs. But traditional property insurance won’t cover this move or the loss of income while you wait.

01:42 Adding business interruption coverage to your property insurance can protect you from these losses. Your operating expenses and lost income will be recovered during repairs.

01:58 Liability risk is another concern for small business owners, and can include claims against you for:
•Bodily or other physical injury;
•Personal injury, such as libel or slander;
•Injury from your advertising (which could include things like libel, slander, invasion of privacy, and copyright infringement); and
•Property damage as a result of your products, premises, or operations.

02:23 Small businesses often protect themselves from these liability risks with commercial general liability insurance, or CGL. CGL allows you to continue normal operations while dealing with real or fraudulent claims.

02:41 Now let’s discuss the human element. Many small businesses are built around the talents and expertise of a few individuals.

03:02 Employee injury is another very real concern. Small businesses are responsible for compensating workers who are injured or become ill on the job.

03:18 You can help control your workers’ compensation premiums by managing exposures and promoting safety. Having the proper pre- and post-accident procedures in place can drastically reduce the severity of a workers’ compensation claim.

03:44 Many businesses store customer data online, which leaves them vulnerable to cyber crime and liability. A large-scale breach can devastate your business.

04:08 Environmental exposures may pose another threat, depending on your industry. You can determine your level of exposure with an environmental risk analysis.

04:28 Every stage of the hiring and employee management process leaves you vulnerable to a lawsuit. While many of these lawsuits may be groundless, defending against them is costly and time-consuming.

04:56 A supply chain that includes third-party suppliers may also prove problematic. A disaster that interrupts your supplier’s regular business operations could slow down or even halt your production.

05:17 Not all of these risks and insurance products will apply to your business. But insurance should be a key component to your risk management plan.