Planning for the risks that will occur in your business is critical to your success. Here are some basic steps to help you make certain you have an adequate risk program in place.
To manage risk in your business:
1. Write your business plan and review it every once in a while to reflect industry changes and new demands.
2. Go through your business plan critically looking at every area that could involve risk, making a list of what areas you need to consider. As it well said in an old proverb: it’s better over react than under react.
3. Take time, preferably with others who know your business, to brainstorm all the possible catastrophes that might occur. Take in consideration global warming and climate change. Can you face a flood? Earthquake? Are you ready?
4. From your lists developed in steps 2 and 3, decide what action or coverage is needed to handle that possibility.
5. For those risks that can be handled by insurance coverage, determine how much and what type of insurance is needed.
6. Choose a reasonable amount of insurance to cover those risks. Remember that you can not insure for more property value, than you currently have. Also remember, that there is no such thing in the world us “I don’t need such high liability insurance limits”.
7. Contact insurance agent to get quotes on the insurance that is needed. Try to work with broker, who has access to several insurance company. Save your time and contact only one broker – Paperless Insurance Services.
8. Arrange for insurance coverage to begin before the doors open on your business, if possible. Remember, that in the U.S. workers’ comp. is a must have before employees have started working.
9. For those risks not covered by insurance, put together a contingency plan for handling each of the risks identified. However, keep in mind, that for each risk there is always a coverage that covers losses.
10. Train all employees in what to do in any if any of these (or other) emergencies arise. Prepare emergency manual and make every employee read it at least once per quarter.
11. Put your plan in a place where it can be located quickly, if needed. Have an extra copy in a safe location.
12. Review your plan annually, including input from all employees.
Tips:
1. Common risks to consider are employee/client safety, theft/fraud, disasters.
2. What is a “reasonable” amount of insurance varies from individual to individual depending upon how risk averse you are.
3. You can lower insurance rates by taking high deductible levels.
4. Even ecommerce websites need insurance.