Cutting Risks | Six areas where small-business owners can get an edge
Running a small business isn't easy. Most business owners spend eight, 10, 12 hours a day doing what they love, then put in more time as the heads of their various departments.
With a limited amount of time, business owners are very careful to focus their energies on things that matter most. In almost all cases, insurance should be treated as a priority, to ensure they won’t lose their business if something goes wrong.
The first step is easy. Business owners should discuss their coverage needs with a local independent insurance agent who has experience working with small businesses and expertise in their specific industry. Beyond addressing basic coverage, such as general liability and professional liability insurance, it’s a good idea to talk about small business coverage that will help manage and reduce risks. Be sure to cover these areas:
Auto Losses. Even if you don’t own a company car, if your employees run business-related errands using their vehicles or are reimbursed for mileage, or if you occasionally rent cars for business travel, you could be at risk. The best agents will make sure you’re properly insured and will work with a carrier to help you build a strong risk management program that will ensure you have a clear, written policy on the business use of company and employee vehicles.
Theft Prevention. With small businesses relying on as little as a laptop computer and mobile device to stay in touch with customers and vendors, even the loss of a PDA can bring a business to a halt. A management program can help you develop and implement security controls that will protect your technical assets and intellectual property.
Data Security. If you process credit card sales, use a flash drive, or if your computer files include customer or employee names, birth dates, Social Security numbers, or bank account information, your business should implement a full data protection plan and procedures. A risk management program will advise you on safeguards such as firewalls, password protocols, and data encryption.
System Failures. Mechanical breakdown includes almost any electrical, heating, air conditioning or pneumatic system that keeps your company running. Your agent can advise you on specialized equipment breakdown coverage, while working with your carrier to suggest preventative measures to help mitigate risks.
Product Liability. If you sell, install or repair something someone else manufactured, or if you import any products, your product liability exposure extends to how your products or service operations may harm others.
Severe Weather. The most powerful and damaging weather is not associated with hurricanes and tornadoes, but snow, hail, lightning, rain and high winds, which can occur almost anywhere, often with devastating results. Protecting your business against the impact of severe weather should be part of your basic risk management plan.
Minimizing exposure and risk in your business begins with taking the time to properly evaluate and understand them. Most importantly, it means not discounting the unlikeliest risks. Working with your local independent insurance agent to review your needs will help you gain that peace of mind that you have the right policies and procedures in place to protect your business — no matter what happens.
Michael Keane is president, small business insurance, at The Hanover Insurance Group of Worcester. He can be reached at mkeane@hanover.com.
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