Insurance Debate: What Should You Do to Protect Your Business?

Every year, business across the United States face billions of dollars in losses. These losses can be caused by environmental disasters, civil lawsuits, inventory shrinkage, accounting fraud, cyber attacks, and a variety of other issues. If a business isn’t prepared for these types of situations, they can face significant financial losses. Fortunately, it’s possible to protect your business by taking the right precautions. The following guide provides simple tips and tricks on how to manage risks at your business or company.

Identify Threats and Weaknesses

When running a business, it’s important to create a SWOT chart. A SWOT chart lists a company’s strengths, weaknesses, opportunities, and threats. Strengths and opportunities are a good way to look for potential growth in a company. On the other hand, weaknesses and threats help a company identify areas where they could experience potential losses.

Plans

Once you’ve identified all the threats and weaknesses in your organization, it’s time to begin addressing each of them. Companies should have three separate sets of plans for a potential problem. These include preventive plans, action plans, and resolution plans.

Preventative

Preventive plans include all steps that a company takes to minimize the risk of a problem occurring. For example, imagine that a company operates a large fleet of vehicles. If a company vehicle is involved in an accident where a third party is seriously injured, the company may face civil liability. This can be mitigated by doing several things, including drug testing of drivers and proper maintenance of all vehicles. 

Action

Action plans are the steps a company should use while a disaster is taking place. In the example above, an action plan may be a set of instructions that a driver should follow in the event they’re in an accident. This could include calling insurance companies, calling a company’s HR hotline, a company legal team, and more.

Resolution

Finally, a resolution plan is a series of steps a company should take to reduce the risk of civil judgment and resultant losses. Civil liability insurance can help a company minimize many of these risks.

For example, imagine that a housing contractor builds a home that collapses and kills several occupants. If all the workers on that job site are properly bonded and insured, the liability to the company itself will be much lower. Without insurance, a company could be on the hook for millions of dollars in this type of situation.

A great insurance planned coupled with preventative measures, like video surveillance systems, thorough employee vetting, and superior safety standards, will keep your business safe. By taking the right precautions, companies can reduce and eliminate many common risks that could result in financial loss.

Dixie Somers is a freelance writer and blogger for business, home, and family niches. Dixie lives in Phoenix, Arizona, and is the proud mother of three beautiful girls and wife to a wonderful husband.