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Read the 9 of the biggest risks small business owners face and what you can do to protect yourself from them. If you do not protect yourself as a business owner you can find yourself in all sorts of trouble and even risk losing your business.

9 Of The Biggest Risks Small Business Owners Face

Being in business these days can be risky. If you do not protect yourself as a business owner you can find yourself in all sorts of trouble and even risk losing your business. In this article we will examine 9 of the biggest risks small business owners face and what you can do to protect yourself from them.

1 - Cybersecurity And Data Breaches

Almost all businesses now rely on computer networks to store and retrieve their important data. The problem is that cybersecurity crimes are on the rise and data breaches are becoming a lot more commonplace.

A lot of small and medium sized business owners may believe that they are very unlikely to be the target of cybersecurity crime and that only the larger corporate entities are at risk. But this is not true as more and more small and medium sized companies are under threat.

It is unwise to believe that your business is immune from a cybersecurity threats. If your business does suffer a data breach then your reputation can suffer immensely, and the cost of recovery is often very high.

So how can data breach and cyber liability insurance protect your business? You will have a choice of what you want to cover and this can include liability, identity protection solutions, legal fees and so on. Data breach insurance is a must as you need to act quickly if your business comes under attack.

With cyber liability / data breach insurance you can mitigate the risk of penalties and civil litigation if you suffer a data breach. Some cybersecurity policies will provide you with access to professionals that can advise you on how to comply with regulations and laws around cybersecurity.

It can cost a small or medium business in the region of $35,000 to $50,000 to recover from a data breach situation. This could put some small companies out of business. Don’t take the risk and contact us here about our comprehensive cyber liability and data breach insurance.

2 - Commercial Property Insurance

It doesn’t matter if you own your commercial building, lease it or rent it you will benefit from having commercial property insurance. You will not only receive cover for your commercial building but also for the items that you need to run your business such as computers, inventory, office furniture and more. The insurance can protect external items such as signs as well.

When you have commercial property insurance you will be able to recover faster from any damage to the property. Covered damages will receive a fast response from the insurance company so that you can become operational again as soon as possible.

Any damage to your commercial property will be expensive to repair and often items within the building suffer from damage as well. When you have commercial property insurance you will receive financial assistance for covered losses which will help you get back up and running again fast.

Your commercial property insurance can assist with replacement costs too. Sometimes covered damages cannot be repaired and need replacement. This will help you to conserve your capital for running your business. There are several advantages to having commercial property insurance coverage. Damage to your property can occur for a variety of reasons.

3 - Business Liability Insurance

No matter how good you and your employees are there is always the possibility that the worst can happen. If a customer becomes dissatisfied for any reason then they may decide to sue your business and whether you are wrong or right it can cost you a huge amount in legal fees.

Quite often a person will sue a business for unfounded reasons and even if you win the case you will be liable for legal fees in the region of $2000 to $5000. This can be serious money for a small business, and with business liability insurance you will receive assistance with these costs.

What about if your business makes a serious mistake? Serious cases can cost your business an absolute fortune can even be the difference between staying in business and going bust. Don’t take the chance of bankruptcy by facing a lawsuit that could cost hundreds of thousands of dollars.

When you have business liability insurance you will show your clients that you are professional and very serious about what you do. Clients may ask you if you have professional liability cover before they will sign a large contract with you.

4 - Business Interruption Insurance

You can never be sure that your business will not suffer from an issue that will render it inoperable for a period of time. If this happens then you can find yourself in a situation where you are not receiving any revenue but you still have a lot of costs that have to be paid.

More and more businesses are taking advantage of business interruption insurance as it provides a way for them to sustain income while fixing the problems that will enable them to become operational again. Most good business interruption insurance will provide income coverage if a disruption occurs.

Business interruption insurance will cover specific costs in the event of a disruption such as lease or rent payments. Your coverage may also include the payment of employee wages for the period that your business is not running. If you have any loans then your insurance could cover these payments as well.

What about if you have to move your business to another location on a temporary basis? A disaster can force this and your business interruption insurance can provide coverage for a temporary relocation.

5 - Commercial Auto Insurance

If you need vehicles to operate your business then standard auto insurance does not provide enough protection. There is always the possibility of accidents when your employees drive your vehicles and this can lead to expensive lawsuits against your company.

When you take out commercial auto insurance you will benefit from higher insurance limits. If a bad accident occurs then you can face large medical bills, legal fees and other punitive damages. A standard auto policy will not provide anywhere near enough coverage for this kind of situation.

You will probably be using vehicles to transport important business equipment and if damaged then you will need to replace them and a standard auto insurance policy is unlikely to cover this. With commercial auto insurance you will receive financial assistance to replace that vital equipment.

You owe it to your employees to fully protect them when they are driving your vehicles to conduct your business. Your employees will have a greater level of protection with commercial auto insurance if they are involved in an accident and a lawsuit results.

If you lease a fleet of vehicles it is very likely that the leasing company will insist that you have comprehensive commercial auto insurance. They will be looking to protect their losses if accidents occur.

6 - Professional Liability Insurance

If you provide professional services then you need professional liability insurance. It is not just for lawyers and doctors; it is for all businesses that provide services such as hair salons, computer repair operations and auto body shops.

It is all about covering errors and omissions. A customer can claim that the service you provided caused them to suffer financial loss because of an error that was made or because you failed to perform a certain task.

When you have professional liability insurance you have protection against lawsuits and any awards or settlements. These costs can be substantial and a business can go under if they have to fund this themselves.

Any of your customers can file a lawsuit against you claiming that you were negligent in the provision of your services. They could claim that your work was inferior or that you did not fulfill your obligations under a contract.

Your reputation is everything in business and your clients will be impressed that you have taken out professional liability insurance to cover errors and omissions. A lot of claims made by clients are unfounded but there are still legal fees to pay here.

Usually professional liability insurance is available for a range of industries and some policies will protect against the provision of faulty advice, good faith violations and misrepresentation cases.

7 - Workers Compensation Insurance

If you employ people than you may be mandated to hold workers compensation insurance. It is mandatory in a lot of states. Obliged by law or not it is a good idea to have this insurance as it provides protection for your workers.

If one of your employees suffers an injury at work then workers compensation insurance will cover their loss of wages and other financial assistance while they are recovering from their injuries. Employees are your greatest asset and you need to do everything possible to protect them.

Most workers compensation policies will cover medical expenses incurred by your employee. This will normally include doctor’s bills, nursing and medical care, physical therapy, any diagnostic tests and medical equipment that is required.

If your worker suffers a disability form injury at work, whether temporary or permanent, workers compensation insurance normally provides partial earnings coverage which can be a great comfort to your employee.

With some injuries an employee may have to train for another occupation as they will be unable to continue with the line of work that you hire them for. Workers compensation insurance will usually provide the necessary vocational training.

If the worst was to happen and one of your workers died while working for your business then their surviving spouse and normally minor children will receive death benefits from the workers compensation insurance.

Another benefit of providing workers compensation insurance is that you can protect your business from litigation from an employee who has suffered an injury or sickness while working for you.

8 - Environmental Insurance

If you have general liability insurance then it is unlikely that it will provide a lot of coverage (if any) for damage to the environment through toxic spills or other forms of pollution. If you have to handle any toxic materials, even the storage of them, then it is a good idea for you to have an environmental insurance policy.

Any kind of toxic spill or pollution of the environment will require a cleanup and the requirements for this will vary from state to state. You could also be facing property damage, bodily injury and other third party claims as a result of the incident. Environmental insurance provides coverage for the cleanup and related legal expenses.

You can normally tailor environmental insurance to cover specific businesses and situations. For example if your company handles the analysis of toxic materials then you should be able to obtain coverage for your testing lab. If you are a remediation contractor then there will be a specific environmental insurance policy for you.

There have been a number of regulations established by the federal government regarding environmental problems. If you have a shipping or other business where your vehicles have to carry toxic substances (including oil) then you must have pollution cleanup indemnity provided by environmental insurance.

9 - Business Insurance

You just never know what is around the corner when you are running a business. An employee could sue you for an injury they received at work, a client could sue you for negligence or a natural disaster could damage your commercial property rendering your business inoperable.

It is essential that you protect all of your assets and the best way to do this is through business insurance. If you employ workers then you will need to have insurance that compensates them for injuries etc.

As a business owner you could face litigation at any time. It doesn’t matter if you win the suit or not you could face the prospect of going under with the legal costs involved. Business insurance will provide coverage for these legal costs.

You will look a lot more credible when you have business insurance. Some companies will insist on it before they sign a contract with you. You become a “safer bet” to work with than the business that does not carry insurance as you have a way to compensate a client if things go wrong.

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