5 risks faced by small businesses and how to help avoid them

When you decided to start your small business, you probably did a lot of research into the steps you needed to take to launch. However, even the most conscientious small business owners can’t anticipate every event that may disrupt or close their business. That can have devastating results.

Fortunately, it’s possible to protect yourself from that possibility with a business continuity plan. By assessing the threats to your small business and putting resources in place to prevent and mitigate them, you can help keep your small business running. The Insurance Institute for Business and Home Safety’s Open For Business-EZ Toolkit offers many helpful resources. Your insurance agent can also help you analyze your small business and identify types of coverage that may help safeguard it against potential risks.

Here are five types of risks to consider, along with some ideas to help protect yourself and your small business.

1.Natural disasters

Few events can be more disruptive to a small business than a natural disaster, such as a hurricane, tornado, or wildfire. In addition to damaging your buildings or shutting down your operations, natural disasters may make operating impossible due to electrical outages. That can lead to ripple effects, such as the loss of perishables in a food-related business.

A business owner’s policy may help small businesses recover after a natural disaster. Businesses generally need supplemental insurance for floods or wind. You may also want to obtain business interruption insurance.

In addition, the US Chamber of Commerce publishes an active list of resources targeting specific ongoing disasters affecting small businesses. During large-scale disasters, your local economic development organization, city, or state government may allocate resources to help small businesses recover, and the federal government may also have resources available, such as low-interest loans from the US Small Business Administration.

2.Accidents

No matter what kind of business you have, accidents can happen, such as a customer slipping on a damp floor or a heavy item falling from a shelf and injuring an employee. Worker’s compensation insurance may protect you if one of your employees is injured on the job. A commercial general liability policy may provide coverage if a customer is injured on the premises. Do you or any of your team members drive for business? Commercial automobile insurance may protect your small business if a company vehicle is involved in an accident.

3.Fire

A fire that starts accidentally, whether it is on your premises or at an adjacent business, can pose a major disruption or even force you to relocate or rebuild your workplace. A business owner’s policy (BOP) may provide coverage for property loss as a result of the fire. You may also want to supplement this with business interruption insurance.

4.Security crimes

Crimes such as burglary and theft, either by shoplifters or a dishonest employee, can be a real risk to small businesses, especially those with valuable or hard-to-replace inventory or equipment. Commercial property insurance may help protect your business from theft or burglary.

5.Lawsuits

A commercial professional liability policy can help protect you if a customer files a lawsuit. This coverage can help cover your legal defense costs for certain types of claims. Additionally, it’s important to consider product liability insurance to help safeguard against claims related to the products you sell.

Determining what kinds of insurance fit your needs can be overwhelming. Fortunately, you don’t have to sort through all the different types of policies yourself. Your agent can help you review the policies and coverage needed for your business. State Farm offers Small Business Insurance for a wide range of small businesses. Your agent can help you review the available policies and coverages for your business, so you can select the right type and level of coverage you need.

Knowing you have a plan for unexpected risks of your growing business can help you stay focused on what you do best.