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Building and running your own business takes a lot of hard work. That’s why protecting it against key business risks is crucial.
Here, we outline some of the key types of risks that business owners should keep top of mind when putting protective measures in place, sooner rather than later.
While many businesses (both large and small) are unique, they are all exposed to very similar risks. Careful planning and risk mitigation strategies are essential to doing business, especially for smaller, less-established businesses that are often more exposed to risks and also more vulnerable when recovering after a potential insurance event.
Cyber security risks
Online and mobile channels are ingrained in the way businesses are run today. This means that it is incredibly important to protect personal data against data breaches . Cybercriminal activity is becoming more frequent and their methods more sophisticated.
Identity theft, payment fraud, phishing scams and ransomeware are becoming increasingly prevelant and can be devastatingly disruptive to a business. It can be costly, impact consumer and shareholder trust and damage a business’s reputation. At worst, it can even sink the ship.
Cyber security solutions, monitoring protocols and fraud detection tools are essential in protecting a business, and so is ensuring that you have comprehensive business insurance that includes cyber cover.
Reputational risks
A good reputation has a direct impact on a business’s ability to grow and prosper. Customer complaints, product or service failures, negative press, bad media coverage and lawsuits can adversely affect a business’s reputation. All of these influence reputation, further amplified by access to social media and its far-reaching capabilities. Something as small as a single tweet can do significant reputational damage within a matter of hours.
Reputational management strategies are essential for monitoring both online and offline activity. This helps to better prepare responses, especially where there is a need to address concerns before they become major issues.
Another good mitigation tool is for your business to ensure it has sufficient business insurance cover, including assistance in developing a full response strategy to a crisis.
Liability risks
This is the risk of the business becoming legally responsible (liable) to pay compensation to a third party for losses caused by the business owner or a representative of the business. Liability risks can include incidents like employee or customer injuries at your premises, damage to property and even failure to meet contractual obligations. Liability risks can be costly to resolve, and can make a signficant financial dent to your business. A good way to protect your business against such risks is having good liability cover that includes sound legal support.
Operational risks
Many things can disrupt business continuity and often occur unexpectedly. Fire or flooding damage to a property and its contents or supply chain issues are examples of what can lead to signficant business interruptions. In South Africa, business owners are also up against power cuts that can result in costly challenges such as power surge events and damage to electric appliances.
Comprehensive business insurance plans can help protect against any resultant financial fall-out, and can be a valuable investment in helping to minimise losses.
These and other risks are part and parcel of doing business, but proactive planning to mitigate the degree of the impact they can have could mean the difference between business success and failure.
This post and content is sponsored, written and provided by Discovery Insure.
