No matter what type of business you are in, you take risks all the time. On a daily basis, you risk experiencing events and circumstances that can impact the success and longevity of your business. Here are three common types of business risk and what you need to know about them so that you can be prepared if they happen.
It is possible for disasters to strike at any time, whether they are natural disasters like floods or earthquakes or whether they originate from within your company in the form of fires or chemical spills. These events are unpredictable but they can mean huge losses of equipment, money and possibly workforce.
Operational risk can refer to a failure relating to your employees, your processes or your tools. Even with excellent safety measures in place, any of these areas can experience a breakdown. People, for example, can make small mistakes that result in huge financial losses. Sometimes processes contain a fatal flaw that results in a company crisis. While reliable, technology is not infallible, and you can experience problems there as well.
Every industry is governed by many rules and regulations. So many, in fact, that it can be hard to keep track of all the requirements you must know about. Regulations cover a variety of areas, from how you treat and compensate your employees to how your company measures up to environmentally sound standards and best practices. Being compliant can be costly and could even fundamentally change the way you do business and the products and services you offer.
While you cannot completely plan for or prevent any of these risks, you can take steps to ensure that the damage to you and your business is reduced. Risk protection insurance can help you recover and lessen the impact of disasters with things like property insurance, coverage for errors and omissions, and business interruption risk coverage.