Risk & Business Magazine General Insurance Services Fall 2019 | Page 29

SMALL BUSINESS THREATS
replacement during his or her recovery?
Key Person Insurance can help you answer
these questions with confidence. This
coverage is designed to provide financial
stability in a time of stress and uncertainty,
allowing you to keep your business moving
forward without missing a beat.
5. INJURIES TO EMPLOYEES
Small business owners, especially those
with fewer than 10 employees, often
struggle with understanding their
employee health and safety obligations.
Just like their larger counterparts, small
businesses have the same responsibility
to indemnify workers who are injured
or become ill during the course of their
employment. Many businesses do not
realize the full effect workplace accidents
have on their organization. Beyond initial
treatment costs and lost production time,
on-the-job injuries have an impact on
insurance premiums, which can increase
your costs for years to come.
Thankfully, by managing exposures
and promoting safety, it is possible to
control workers’ compensation premiums.
Having the proper pre- and post-accident
procedures in place can drastically reduce
the severity of a workers’ compensation
claim, and implementing a comprehensive
safety program can reduce the accident
rate. Together, these two steps can produce
tremendous long-term savings.
6. MANAGING ELECTRONIC DATA AND
COMPUTER RESOURCES
Small businesses often lack a formal IT
department or even rudimentary internet
security measures, which leaves them
vulnerable to unscrupulous cybercriminals
searching for an easy target. With an
estimated liability of more than $200
per compromised record—multiplied
by hundreds or thousands of customer
records—the cost of a single data breach
incident can be devastating for a small
business. If your business stores customer
records electronically, it is crucial that you
have robust security measures in place. In
addition to taking preventative measures
to reduce internet-based exposures,
specialized technology coverage, such as
Cyber Liability Insurance, can help protect
your business against damage from cyber-
attacks, data breaches, and other internet-
based exposures.
7. ENVIRONMENTAL EXPOSURES
Think of a business with significant
environmental exposures. What comes
to mind? Most people think of a large
manufacturing, mining, or petroleum
operation. But these are not the only
industries at risk for environmental
liability losses. It is important to perform a
comprehensive risk analysis to determine
your own level of exposure. Keep in mind
that because most commercial insurance
policies contain pollution exclusions,
unless you carry Environmental Insurance,
you may be uninsured against significant
environmental loss exposures.
8. EMPLOYMENT PRACTICES
From the moment you begin the prehiring
process until the final goodbyes at the exit
interview, you are at risk for a lawsuit. In
fact, three out of five employers will be
sued by a prospective, current, or former
employee while they are in business.
Although many lawsuits are groundless,
defending against them is costly and time-
consuming. Your business should take a
hard look at whether it can afford to defend
itself against accusations of wrongful
employment practices. If not, there is an
insurance solution called Employment
Practices Liability that will protect your
company against wrongful termination,
discrimination (e.g., age, sex, race,
disability), or sexual harassment lawsuits.
disaster that interrupts your supplier’s
regular business operations could have
a crippling effect on your production
abilities. Although you should always try
to minimize potential liability through
contingency planning and other risk
management techniques, as supply chains
grow across the globe, sometimes there
is little you can do about the exposures
faced by your suppliers. In a perfect world
you could simply avoid doing business
with companies that present numerous
risks or that are unwilling to conform to
your standards, but pricing constraints
and niche markets limit the number of
potential suppliers to choose from.
Supply chain insurance is meant to
cover losses you incur as a result of an
interruption to your supply chain. Such
coverage allows you to work confidently
with suppliers who face exposures beyond
your control.
Insurance is a key component of any
comprehensive risk management plan, but
successful risk management also involves
prevention, training, and contingency
planning. Contact us to learn more about
the tools and resources we can offer to
help you manage risks, control workers’
compensation costs, advance safety, and
boost employee morale. +
9. CONTRACTS
When first starting out, many new
business owners simply don’t have the
time or expertise to adequately evaluate
each clause in everything they’re signing.
This oversight, however, can create major
problems down the road. In many cases,
small businesses become saddled with
large additional risks, accepted via risk
transfer from savvy suppliers or customers.
While it’s tempting to shave costs by
skimping on legal fees, making sure your
business isn’t accepting additional and
unnecessary risk can save you a lot of
money over the long haul, both in legal
costs and in insurance coverages.
10. MANAGE YOUR SUPPLY CHAIN
Do you rely on one or more third-party
suppliers to produce certain components
used in your products? If you do, a
BY: ELIZABETH JOHNSON
COMMERICAL ACCOUNT EXECUTIVE,
GENERAL INSURANCE SERVICES
Elizabeth Johnson is an enthusiastic
professional with extensive experience
in building customer relationships.
A native to La Porte, she has worked
for
the
nonprofit
community,
manufacturing industry, and boating
industry throughout her career. She
received her Bachelor of Science
in Business at Purdue University
Northwest. Elizabeth enjoys spending
time with her family, kayaking, hiking,
biking, and snowboarding.
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