Business Insurance: Smart Strategies for Reducing the Risks and Costs

Business is inherently risky. That’s why you started your own company. You love the fact that there is no safety net. However, that doesn’t mean that you have to take unreasonable risks with your company or your life. Business isn’t just about taking risks, it’s about managing them so you can maximise profits.

What Can Go Wrong?

The first step in managing risk is to identify what can go wrong. Every business has risks peculiar to it. For example, a restaurant takes on the risk of food poisoning, allergic reactions, and personal injury. While many restaurants would rather not assume the liability or responsibility for accidentally serving someone food that they are allergic to, a customer standing on his rights will probably pursue legal action – especially if he made his allergy to a food clear.

How could a restaurant protect itself from lawsuits? Well, mistakes happen, so there’s no way to absolutely eliminate this risk. However, insurance is one way to protect the business.

The Role Of Insurance

Insurance transfers the financial risk of loss away from the company and onto an insurance company. Since most companies simply do not have the cash reserves to retain every possible risk, outsourcing the risk to an insurance company usually makes the most sense. Insurers are very well equipped to pick up the legal tab when the unthinkable happens. As good as insurance is, it only transfers financial risks.

Having Good Protocols In Place

People today are more likely to sue. The larger you are, the bigger the target you become. That’s why¬† things like safety protocols are so important. Take the restaurant example above. A restaurant can mitigate the risk of a customer being poisoned by building a culture of safety right into the business.

Common food allergies like wheat, soy, peanuts, and eggs should be strictly controlled in the cooking process. Canned or prepared food that that the restaurant uses should not be used throughout the company’s menu.

All waiters and waitresses should be trained to ask everyone they serve if there are any food allergies. In addition to this, all staff should be intimately familiar with the restaurant’s menu and what goes into the food. When a customer asks, the waiter should know what is in the food they’re serving.

This will immediately reduce the risk of serving someone something they are allergic to. What common risks exist in your business? What safety protocols would mitigate those risks?

Giving Customers The Benefit of the Doubt

Giving the customer the benefit of the doubt is a lost tradition. The customer might not always be right, but they are always the customer – the one giving the business money. Some businesses immediately assume that any problems that arise are the customer’s fault. In reality, a customer may just think he’s being treated unfairly. Negotiation, rather than an antagonistic attitude, may result in fewer lawsuits and a happier customer. Not only that, it protects brand image and the company’s reputation.

George Nesler is a businessman with several years under his belt. When he has free time, he likes to help others by blogging online. Visit this Calgary insurance broker link to learn more about risk reduction.

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