Grow your business and insure tribal risks
As you grow your tribal business, your potential for risks grows as well. That’s why a close relationship with your insurance agent is so crucial: to help you identify and insure specific tribal risks. Business risks are similar, regardless of the size of your company, whether a sole proprietor or managing 300 employees. Growing a business typically means adding more employees, more equipment and inventory, a larger location…all of which add to your risk.
Expansion can have a major financial impact for a company of any size. The right kind of insurance can help grease the wheels for growth and market expansion, providing important financial protection to minimize tribal risks.
A recent Aon survey uncovered the top risks on a global level; we’ve used their data as a starting point, then allowed other experts to weigh in. In all, we’ve uncovered the top 11 tribal risks for small-to-medium-sized companies (SMBs). While it’s important to note that these risks vary from industry-to-industry, overall, these increased risks are important to manage as part of your growth strategy.
How expanding your business increases loss potential, and how to insure tribal risks
We’ve named the top risks for a growing tribal business to be:
- Hiring new employees. As a business owner, you already know you’re not only responsible for the safety of your employees while on the job, but also responsible for your employees’ actions while on the job. We encourage you to hire carefully for skillset and culture fit, taking the time to call references. When you hire, it’s time to check with your agent: You may need to update not only your workers’ benefits coverage when hiring new team members, but also your EPLI (employment practices liability insurance).
- Incurring reputational harm. Unhappy, over-reacting customers out for revenge. Fake news. A valid injury from your product or service. The more customers you have, the greater the risk that someone will be injured or simply become disgruntled, and post on their opinions on social media and review sites. Many times the injury incident is real, but it’s blown way out of proportion. Do you have a reputation risk control strategy in place that can curb an incident from becoming a crisis?
- Adding new equipment or furnishings. More than half of SMBs in the Aon survey planned to add new contents. Do you need to update your limits to include these new items, so that they’re adequately covered in case of loss?
- Recovering from property damage. Fire, earthquake or certain weather events: Your property coverage helps you get back to business faster, when disaster strikes.
- Moving to a new location. Congratulations that your business has grown so much that you need more space! When considering a new location, survey the security and safety issues that need to be addressed. Upgrading/modifying your property coverage to fit your new surroundings is also crucial.
- Regrouping after a burglary or theft. Arrowhead’s tribal property insurance can help pay to replace stolen business property.
- Recovering from an auto accident. When you or one of your employees uses either a company vehicle or their own vehicle for business purposes, Arrowhead’s auto physical damage and liability coverage is tailored to address unique tribal national auto exposures. Here are some ways you can lower your commercial auto insurance premiums.
- Handling a customer injury. General liability insurance can help cover costs when customers are injured on business property or off-premises, from business activities happening elsewhere.
- Becoming a cyber target. When you were just a mom-and-pop shop, your risk for cyberhacking was relatively low. However, as you grow, your need for an IT infrastructure and greater security increases. Now’s the time to review your cyber security measures and coverage, protecting not only yourself, but also your customers’ and employees’ data. Learn more about cyber attacks and cyber protection.
- Restarting after a business interruption. What would happen to your client’s business if severe weather, earthquake or other manmade crisis closed them down for weeks or months? Create a business continuity plan to identify key ways to minimize financial losses.
Related: Business interruption and back-up plans
The big picture: Mitigating loss potential and insuring tribal risks
Besides having adequate coverage for your business risks, there are a few more strategies you might consider incorporating in your risk management and loss prevention efforts. The Small Business Administration lists these best business practices, some of which we’ve already covered: Hire right. Enhance safety in your facility. Check your computer security. Stay compliant with constantly changing federal, state and local regulations. We also add these:
- Define acceptable risks. Which risks can be termed as positive, with little downside? Or if there is a downside, is the financial risk manageable?
- Prioritize risks. As growth strategies are weighed, which add risks that are most likely to occur? Which add risks that will have the biggest impact?
- Determine the best ways to minimize risks. Evaluate possible scenarios that can occur with growth. Establish contingency plans to mitigate risks wherever possible.
- Get coverage for key insurable risks. Work with your agent to determine which risks are simply too great or too costly to self-insure, such as an on-premise accident. Then decide which coverage limits and enhancements are right for your business.
- Create risk management plans and procedures and train employees. With the help of your agent or Arrowhead’s risk management solutions, create strategies and training programs for all employees, familiarizing them with the company’s risk management processes.
- Monitor and review all risk data. Where have injuries occurred? Where have losses occurred? Make it a practice to continually review your risk management plan, always on the outlook for both new and obsolete risks.
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