by | Small Business, Workers Compensation |

Today’s guest post is brought to you by Alyssa DellaCamera from Eaton & Berube Insurance Agency, an independent insurance agency located in New Hampshire.  Learn about the common threats small businesses face and strategies to manage them.

As many small business owners understand, owning your own company offers many rewards, but with these rewards come certain risks. To protect your business from the exposures it faces, it’s crucial to identify these threats and develop a risk management plan. The following list of common threats to small businesses will help you identify the risks your company may face, as well as provide you with strategies to manage them:

1. Property Losses

For many small business owners, commercial property represents one of your largest assets. To protect your business from a potentially devastating property loss, it’s important to ensure that you have adequate coverage. Taking an inventory of your property can help you determine the effects a loss could have on your business, as well as how much coverage you need. Depending on your business’s specific needs, there are many different forms of property coverage available to you, but a standard policy will provide the replacement cost value for your building and the actual cash value for your commercial property.

2. Business Interruption

According to the U.S. Department of Labor, an estimated 40 percent of businesses never reopen following a natural disaster like a flood or a fire. Has your business developed a risk management plan in case disaster strikes? In many cases, a natural disaster forces businesses to temporarily relocate while the damages to the original building are repaired. However, it’s important to understand that a standard commercial property insurance policy does not include coverage for this move or the loss of income your business may suffer during this transition. Securing business interruption coverage, which will cover operating costs and loss of income you incur while your permanent location is being repaired, will help you solve this problem. Adding this type of coverage to your property insurance policy will allow you to maintain payroll during the temporary relocation period, giving your employees peace of mind knowing your business will recover from the disaster.

3. Employees’ Injuries

Whether you have 15 or 15,000 employees, business owners all share health and safety obligations, especially when it comes to workplace injuries. If one of your employees sustains an injury on the job, you are obligated to provide him/her with workers’ compensation coverage and indemnity payments. Employees’ injuries can be detrimental both to the affected employee and to your business as a whole. From a business owner’s perspective, workplace injuries not only mean medical treatment costs and lost productivity, but workers’ comp claims can also inflate your business’s insurance premiums. To avoid these unfavorable outcomes, it helps to educate your employees about workplace safety and loss control, and to ensure that you have proper pre- and post-accident procedures in place. By taking these safety precautions, you will significantly reduce your business’s risk of workers’ comp claims, allowing you to effectively manage your premiums and save money over the long term.

4. Liability Losses

In today’s litigious society, it is nearly impossible to avoid liability claims. Although you may be confronted with these types of claims, it is possible to control your losses. One way to accomplish this is by securing sufficient Commercial General Liability (CGL) insurance, a type of coverage that will protect your business against claims of bodily injury or other physical injury, personal injury such as libel or slander, advertising injury, and property damage resulting from your products, premises or operations. Regardless of whether claims brought against your company are legitimate or fraudulent, your CGL policy allows you to continue normal business operations while handling claims, as well as helps you finance the cost of defending and settling them. To ensure that your CGL policy has adequate coverage limits, it’s best to consult your independent agent, who will assess the exposures you face and put together comprehensive coverage accordingly.

5. Electronic Data Breaches

Considering the endless advancement of technology, one risk that has emerged as one of the most common threats to small businesses is a data breach. Some small businesses lack an IT department and/or advanced security measures, putting themselves at an increased risk of a cyber attack. However, other small businesses have taken recommended security precautions and have still found themselves victimized by cyber criminals, rendering the need for additional protection crucial. One way to secure this extra protection is to obtain cyber liability insurance, a type of coverage that helps you finance expenses associated with a data breach, from detection costs to notification expenses. This type of coverage proves invaluable in the event of a breach, especially considering that the average data breach cost companies $5.5 million last year. To help your business avoid the financial disaster a data breach can cause, it’s crucial to have an effective combination of security measures and coverage in place.

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