If you’re looking for a risk management plan, consider the ups and downs of adding insurance throughout every step. The upfront cost today may save you years down the road.
Insurance is handy because small business budgets often cannot survive catastrophic outcomes. Therefore, most companies will have you complete a small business risk assessment. During this process, you will review profitability, market share and customer base, company property, employee endangerment, legal issues, interruption to regular operations, or the potential for a shutdown.
Small business risk management starts with understanding the overall picture. For example, if your industry is volatile and highly regulated, like the cannabis industry, or if you rely on industrial processes that might contaminate cities, insurance can help soften any business blow.
Part of owning a business is mitigating business risk for the unforeseeable. For example, some states require workers’ compensation or personal liability insurance, while others suggest it. Small business risk management considers all phases and stages of the business.
Below are the types of insurance and what they cover.
Could you survive if your business was closed through an event or had executives participate in questionable practices? Those learning to mitigate risk in business know that one size does not fit all. Risk management for small businesses begins with the first employee and grows with each additional employee, business offering, or physical location.
Lastly, consider trusts and wills as the last component in risk management for small businesses. Although this isn’t a formal insurance option, it’s emotional insurance. Consider this a personal investment, too. If you have partners or stakeholders and a family, everyone needs to understand what happens in the case of a succession or incident. Be sure to name the recipients by name rather than just by relationship.
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Coach Dave
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