As a business owner, you are challenged with many important decisions to run a successful operation. One of the many challenges is how to protect your business assets.
Your business assets include the products and services essential to the day-to-day operation as well as the physical location and personal property you own. Ask yourself, am I doing what it takes to remain in business in the event of a loss?
The answer to the question may necessitate an evaluation of your business insurance needs. You purchase insurance so that if your company suffers a loss you can remain in business.
When that loss occurs, you pick up the phone, call your agent and report a claim. You expect the insurance company to adjust the claim and either send you a check or defend you in court.
As the primary risk manager for your business, you’re literally betting the company on the fact that your risk management plan identifies and adequately addresses those risks that could put you out of business.
How do you develop a good risk management plan?
Manage your risks
Start by looking at your individual business operations, identify the business assets critical to performing those functions, and then consider the risks that could jeopardize those critical assets. Although it will vary by each business, Page 60 has a framework to help you get started.
Next, calculate the value of your critical business assets. Losing which assets would force you to close the business? Think about what it would take to replace those assets.
Also, how long would it take to replace them? Do you need to insure every asset, or do you have the cash reserve to replace some assets without the need for insurance?
If you need to insure an asset, can you afford to take a higher deductible in order to reduce the cost of the insurance? Once you’ve given some thought to your risk management, it’s time to call an insurance agent.
The hard part is over once you finish the evaluation of your critical business assets and identify your business insurance needs. It’s time to call an agent who can help you design a sound risk management plan, provide you with coverage and price options, place the insurance with financially stable carriers and be there to help if you suffer a loss.
Remember, the insurance process is ongoing. As your business expands or changes, so might your insurance needs. As a business owner, you should complete an insurance check up on an annual basis or sooner if necessary. It will give you the peace of mind you need and deserve!
|RISK MANAGEMENT PLAN|
|Business Function:|| Store
| Load Truck(s)
|Critical Business Assets:|| Building inventory
|Truck(s)|| Vending machines
|Risk exposures:|| Property loss
Loss of income
Loss of cargo
|Insurance policies|| Business owner’s
| Commercial auto
|Inland marine||Business owner’s|