Member Article

Evolution Of Various Business Risks and Their Solutions

Owning your own business has many opportunities, but it also comes with a number of risks. Your business may be doing well, and you’re on track to meet or even exceed all of your goals. Then the unthinkable happens: an unexpected disaster hits. You may lose money, property, data, or end up in a legal nightmare. You never know when these disasters will happen or what they will be, either, which can make it even harder to be ready to deal with them. However, you still need to prepare a number of different disaster recovery plans. Take a look at the different types of business risks and prepare solutions to all of them.

Note that there are some cases where you can look at older, successful risk management plans and adapt them to your company. Remember, though, that technology is always evolving. Some of those older solutions may no longer apply.

Property Loss

Property loss can be caused by natural disasters such as fire, tornado, flooding, or earthquakes. These disasters can hit when you least expect them to. Some may be fairly minor. Flood damage can force you to replace all of the carpeting in your office, but it may not lead to data loss. Fire or earthquake, however, can completely destroy your building and everything you own within it.

The solution here is to have a business owner’s insurance policy. This way, even though you will suffer a major setback due to the loss of property, you will receive financial reimbursement and will have the funds to start rebuilding. These policies are available both to businesses that are leasing a space and those who own the building. Also take note that not all policies cover every type of disaster. Flood and earthquake insurance, for example, often have to be added to the policy at an additional cost.

Interruptions

There are a number of types of threats that can interrupt your business. Natural disasters are just one of these. Technology failures, sudden loss of cash flow, or your own illness could bring your business to a grinding halt. When that happens, you may find yourself suddenly dealing with the loss of customers and income.

You can purchase business interruption insurance to help cover the cost to continue operating your business and help offset your loss of income during this time. These policies usually cover as much as a year of lost income. You should also prepare a disaster recovery plan. This plan should outline what steps you need to take to keep your business moving while recovering from the disaster. It also needs to outline things such as who is to speak for the company if you’re not able to and how PR is to be handled.

Security Breach

If your network has been breached, you may be in much more trouble than if your entire building had burnt down. That’s because these security breaches often result in theft of data rather than loss of information. If hackers walk away with your customers’ private financial information, you are going to have a lot more to worry about than just a network breach.

Having a plan to handle loss of data is absolutely vital. This is a problem that didn’t exist until recently, so it’s not something many older business leaders were prepared for. Having plans for data backup, especially off-site backup, is important. You also need to have the data encrypted and secured behind different firewalls. Writing policies for employees that cover passwords, bringing their own devices to work, and how to properly access information is also necessary these days.

Another way of protecting your network and its data is to make sure you’re using the correct software. For example, you can add additional security to your network by using real time intrusion detection software such as Snort (owned by CISCO). This program will alert you whenever someone tries to access data they do not have clearance for no matter what time of day it is. The software can also automatically restrict the account even more and attempt to remove the user from the network.

Injuries

Injuries in the workplace can lead to more than lost productivity. If your employee was hurt on the job, you may have to pay out a large amount of money in workers’ compensation. If the employee sues you and you lose, you’ll be out even more money. These injuries happen more often than you might think, especially in the manufacturing industry.

The solution here is twofold. First, you need to have worker’s compensation insurance. In fact, it’s often required for you to operate your business. This insurance will help cover the costs of medical bills, lost wages, and other expenses related to the injury.

Second, make sure that all of your employees are fully trained on safety measures. They need to be fully trained and certified on any equipment they use. You need to do regular safety inspections and replace or repair anything that presents a hazard.

Liability

If someone is accidentally injured while on your property, their property damaged, or they believe their reputation has been damaged by something you’ve done, they may sue you for liable. These lawsuits can cost you thousands. Even if you win, you may still have to pay legal fees. You need to make certain that you’ve covered in the event of libel, slander, injury, or other accusations are leveled against you.

Having a plan for dealing with liability issues is step one. This will force you to walk through the different scenarios that can lead to a lawsuit. You can then design plans to deal with each of them. Take advantage of all the network security tips, safety tips, and other assistance to do everything you can to protect your business.

You also need to make certain that you have all of the proper insurance policies, including general liability, professional liability, and product liability policies. All of these can help cover your business if you are sued. If you don’t have this protection, you may end up closing your doors from one single lawsuit.

This was posted in Bdaily's Members' News section by Sheza Gary .