Three Risks Small Businesses Often Forget About


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It should come as no surprise that insurance is necessary to run a successful business. However, many businesses, especially smaller businesses and those just starting out aren’t getting proper coverage because of the cost.

That’s right, depending on your industry, and the risks that come with it, insurance may come with a big price tag. What many of these businesses are failing to realize is that while insurance may be pricey, it also will save you should something go terribly wrong within your business.

More often than not, business owners will put their business at risk, without even realizing it, because they are too optimistic to realize how at risk they really are. So, If you’ve found yourself saying, “yeah yeah, it’ll never happen to me” you better check yourself before you wreck your business.

To make your life easier, we’ve rounded up some of the most common mistakes small business owners make when it comes to assessing risk and getting the right insurance so that you won’t make the same mistakes.

Taking the Time to Learn About Your Location

It’s tough to think about the weather when you’re starting your business on a bright sunny day in May, but unfortunately the weather changes, and fast. Many business owners fail to think about the weather-related risks that their location is the most prone to. This is especially true when business owners move to a new place to start their business.

Natural disasters and weather emergencies especially impact those businesses with a storefront. When the weather gets tough these businesses often have to close their doors, which means they can lose valuable business. This is very common in regions where it snows and you need a car to get from place to place.

Finding out what natural disasters have occurred in your area over the years will help you in understanding what you need coverage for. The Weather Channel is a great resource for understanding what can happen, where, and when, so head on over there and start researching your area. Some other things you can do to mitigate the risks that come with weather are:

  • Knowing protocol for a weather emergency in your area
  • Understand the damage a natural disaster could potentially have on your business, employees, and property
  • Working with town and city decision makers to ensure your business and other small businesses in the area will be taken care of
  • Educating your employees on what to do in a weather emergency
  • Getting the right insurance, such as Commercial Property Insurance to protect your physical assets

Forgetting that People are People

It would be great if we could control every move our employees or clients make, but unfortunately, that isn’t the way things work. The fact is: People are unpredictable. Every person thinks and moves and works slightly differently, which means there is plenty of room for injury and human error.

Insurance such as Employment Practices Liability Insurance and General Liability and others can help you account for the risk of human error and cover you and your business should something go wrong because of it.

For example, if a client slips-and-falls on your property and decides to take legal action, General Liability Insurance would protect your business by helping to pay the medical bills for the injured party and paying for your legal defense.

Luckily, there are some things you can do to mitigate employment risks, which we’ve listed here:

  • Implement a Zero Tolerance Policy to cut down on the chances of discrimination
  • Train your managers on employment practices, procedures, and laws
  • Have clearly defined time-off policies
  • Make sure your office is up to code and that there are is no potential for accidents
  • Have the right insurance in place for your business

Forgetting the Risks that Come with Product

So, you’ve got an awesome product or, at least, you think you do. Welp, sorry to say, but delivering a fully-baked product is tricky. Whether you’re creating custom shirts or serving food, there’s room for error with the product you are selling and it’s incredibly common to make a mistake.

Errors can’t always be avoided, but there are some things that you can do to prevent them or protect yourself. One example would be running a testing or beta program with a new product, to find any bugs or glitches that your product might have. By providing documentation of tests run, you can help lower your risk in the case that a user has problems.

Insurance may also help cover certain aspects of your product. For example, General Liability would protect a company if they were to be sued for food poisoning or contamination.

Your business comes first, so make sure you have the protection you need, and you’ve thought through all of the risks. Every part of your business comes with risks, from weather to people, and most of them are out of your control, which is why it’s key to take a few minutes to get protected.

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