A surprising statistic to many is that 96% of Alberta companies have 50 or less employees, making them, technically, small businesses. Together they bring in more than $100 billion into the provincial economy a year. We truly have an entrepreneurial spirit. The “we can do it” attitude of which is one of the reasons Alberta is so successful.
The people of this province put a lot of blood, sweat and tears into running their businesses, but sometimes their laser-focus can be a little bit too narrow. Business risk management should be as commonly discussed as client and customer needs. Ensure you and your valued employees’ income is never put in jeopardy by having numerous contingency plans in place to help ride out unforeseen circumstances.
Effective business risk management can prove pivotal for many reasons, including:
- Saving you resources such as time, people, property, assets, and income
- Reducing legal liability
- Improving operational stability
- Defense of brand and reputation
- Protection of your employees, clients, and customers
- Decreasing the chance of a major business interruption
Here are a few business risk management tips to keep you up and running no matter what happens.
1. Don’t neglect your insurance
As businesses grow and change, so does their insurance needs. At least once a year check in with your insurance provider or broker to go over your coverage and make any necessary alterations. Renewal time is ideal for this, as you are already getting a handy reminder in the mail. Don’t just file those papers away. Take the opportunity to talk with an expert and make sure your coverage is where you need it to be.
Some details you might want to cover are any changes to your business, such as: equipment bought, upgraded, or otherwise retired, if your liability limits are still adequate, if errors and omissions insurance should be a consideration, and if there are any other kinds of specialized policies you may be interested in, such as oil and gas and contractors insurance.
Also inquire about any cost-saving measures you may be able to access, such as usage-based insurance for fleets of vehicles and discounts such as those for loyalty and bundling policies.
2. Develop a comprehensive emergency plan
Business risk management means being ready for every eventuality, especially the most inopportune. Emergency preparedness is crucial for business continuity.
Begin by identifying as many risks or issues your business could face as possible, including weather incidences such as floods and power outages, and human issues such as injuries and accidents. Then create a plan to deal with each incident, and ensure all employees are trained in emergency response.
- Hold semi-annual drills to keep staff familiar with evacuation plans.
- Designate a back up (or two) who knows all of the passwords and codes in the case the primary contact is absent or incapable of action.
- Keep a well-stocked emergency kit and assign someone to check it regularly.
- Install water sprinklers to stop fires fast.
- Invest in a security system to deter thieves, or even catch them in the act.
Depending on the type of business you own, it may be a good idea to install a back up generator for extended power outages. Especially in the case of the food service industry, a generator could save you thousands in lost inventory.
Unfortunately, not everyone is honest, and even your own employees could become a risk to your business. It’s hard to imagine, but business risk management should include protecting yourself from business crime.
Some of the most common types of business crime include:
- Stealing cash, merchandise, or anything of value
- Defamation or sabotage to cause an interruption in business and/or damage to your business’s reputation
- Misuse of assets such as using a business’s printer or computer for personal gain
- Misrepresentation of time spent working, such as time card fraud
Employees steal or act out because of feelings of entitlement, disgruntlement, and personal issues. Experts suggest using automated tracking systems to track time and products to eliminate the possibility of human interference in finances and inventory numbers. Cameras are also a deterrent.
Creating a safe, positive, and supportive work environment to help your employees feel valued will help curb improper behaviour on the job.
Cyber criminals are very good at what they do, and they are always working on new scams. The vast majority of cyber criminals are after personal information — yours, your employees’, or your clients or customers. Armed with your details, cyber criminals can steal funds and assets from your company, or steal your identity and pose as you while committing fraud or theft.
Cyber insurance can save your business. In Alberta, cyber insurance policies can be configured to cover you for losses and liabilities resulting from:
- Privacy breaches (first-party and third-party)
- Computer hacking
- Identity theft
- Phishing scams
- Internet extortion
- Breaches of cyber security
- Distributed denial of service attacks
Always back up your data, ideally in two separate locations, such as the cloud and on an external hard drive. If in the event that you are hacked you will at least be able to restore your business operations back to normal relatively quickly.
Keep Your Business Up and Running No Matter What Happens
Business risk management will help ensure business continuity under any circumstances. Business insurance can be configured in a number of different ways, and the expert insurance brokers at Lane’s are skilled at finding the exact right policy to fit your needs. We are happy to answer all of your business insurance questions. Contact us at our Calgary, Edmonton, Banff, and Alberta offices today.