The Top Risks for Small Businesses

Business owners face various challenges that may cause financial or reputational harm. Businesses may be able to recover from these risks; however, it can be a costly and time-consuming process. It’s essential to be aware of the common risks small businesses encounter to help mitigate and prepare for them.

What Are the Top Risks for Small Businesses?

The following are the most common risks small businesses experience:

• Physical risks—Physical hazards, such as a fire, can impact any business with a building, inventory or equipment. It is essential to have an emergency evacuation plan, fire alarms, smoke detectors and other safety precautions in place.
• Location risks—Many businesses deal with weather-related risks based on location. This could include wildfires, hurricanes, earthquakes, tornados or other natural disasters.
• Human risks—Employees, customers and clients can also be seen as risks to a business due to the possibility of on-site injuries, discrimination, harassment, physical violence and theft. People are often unpredictable, which can put your business at risk for various types of lawsuits.
• Strategic risks—Businesses may face risks based on their decision-making and overall planning. For example, a business may decide to acquire another company; however, this new asset may have unforeseen risks, such as reputational or financial issues.
• Cybersecurity risks—Businesses that store data or use the internet for business operations are always at risk of data breaches and cyberattacks. Small businesses may be more vulnerable to these attacks because they lack adequate resources to protect themselves.
• Reputational risks—Businesses may have to deal with customers, clients or employees who threaten their name for legitimate reasons or as a form of retaliation.
• Compliance and legal risks—Businesses may face risks from failing to adhere to federal, state or industry regulations.

What Types of Insurance Do Small Businesses Need?

The following are some business insurance coverage options an insurer may recommend to help manage these risks:

• Property insurance
• General liability insurance
• Business interruption insurance
• Workers’ compensation insurance
• Cyber liability insurance
• Commercial auto insurance
• Commercial umbrella insurance
• Professional liability insurance
• Business interruption insurance
• Employment practices liability insurance

How to Protect Your Business From Risks

A robust business insurance portfolio is the best way to protect your organization from costly incidents. Contact La Oficina Insurance Agency to discuss risk management solutions. We can help determine which policies and premiums are best for your operations.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.