Four things every boss can do to reduce risk
The recession has prompted many people to set up their own business and become their own boss.
Going it alone in business can be an exciting time full of possibilities and adventure. It can also be a terrifying experience - particularly due to the unknown factor: risk.
Where possible, you must protect your business against the possibility of problems occurring. Fire, flood and crime along with legal responsibilities to the public and employees are just some of the possible risks your business may face.
A major problem shop owners are experiencing at the moment is the increase in theft, public liability and fraudulent claims - which are, in turn, pushing up insurance premiums.
Customer theft is a major problem for retailers. Having goods stolen can quickly make a business unprofitable and fail. It can happen in a number of ways, such as theft of stock, money - or even goods in transit.
Although you cannot get insurance against shoplifting, business owners can insure stock against theft by forcible or violent means. So if shop is broken into and stock is stolen, or a customer robs the store at gun-point, the business can retrieve the value of the stock taken.
Public liability insurance, which protects you against claims made by members of the public who become injured on your business premises, is a must if you have a public office or business. Business property cover, which insures your business premises, is also worth having. This insurance will usually cover the structure of a building and the contents, thereby protecting you against fire, storm, flood, malicious damage and water damage.
Make sure you don't pay through the nose for your insurance however. Here are four steps which should prevent you from doing so.
1. Classify your business correctly
For example, if you own and run a small fruit and veg shop, do not classify yourself as a supermarket. This could affect your initial premium and any future premiums should a claim be made.
2. Review cover every year
Businesses change over time - so your insurance should mirror this. When it comes to renewal stage, it's important that people check what type of cover they need.
They may find that they are paying for additional coverage that is already provided by a separate insurance policy already in place.
3. Do regular stock-takes
Businesses often pay to insure stock or fixtures and fittings which they no longer have. This is why it is so important to do regular stock-takes.
By doing so, you can find out what stock you no longer have - and you should see your insurance premium come down once you ask your insurer to reflect this. The same applies to fixtures and fittings. Remember, it is equally important not to under-insure your stock - otherwise, you leave yourself exposed if a claim arises.
4. Invest in a CCTV system
By investing in a good quality CCTV system, you can reduce claims for theft and public liability - as well as fraudulent claims against your business.
These act as deterrents which make a business less likely to be robbed or destroyed by fire. These will be considered when companies calculate your premium and could lead to a cheaper quote.
Tony Walsh is commercial insurance manager with the CFM Group
Sunday Indo Business