By Dr Pat Laino

When business owners are ready to open their business, insurance and security costs should be thoroughly researched as to how much is enough.  Knowing what kind of insurance to carry and how much security that you need are important aspects of good risk management. 

There are three areas to consider when insuring your business: (1) the size of any potential loss, (2) the probability of a potential loss and (3) the insurance needed to meet the loss, if anyone of these should occur.  No business can possibly eliminate all of their risks, but you have to be prepared for anything that may happen and have the insurance to cover it. If a loss could destroy your company, or cause serious financial damage, then don’t take the risk, but have adequate insurance coverage. 

Some losses that may occur relatively frequent are predictable and are typically small.  If these can be assumed by the owner, without too much hardship, then these can be budgeted as part of the normal “cost of doing business”. Some examples are bad-debt losses or shoplifting, where it’s better to install precautionary measures instead of costly insurance.

You should research business insurance coverage in the following areas:  fire and general property, plate glass coverage, burglary, bonding, fraud, public liability, workers’ compensation, product liability, life insurance for owner, business interruption and errors/omissions that covers injuries suffered by customers. It is thought that insurance coverage is all about risk taking, so never risk more than you can afford to lose. 

After identifying your insurable risks and the type of insurance that is available to cover these, decide how much of a loss that you can afford to bear yourself and what you need to transfer to an insurance company.  Next, secure three bids and carefully evaluate the coverage costs by each before deciding on your insurance carrier. My recommendation is to find an insurance company with a good reputation that can assist in your risk management planning now and as your business grows.  

It is recommended that you take the necessary security action to protect your business before you even open the doors. Expensive equipment and cash attract burglars and this is an area where owners must consider adding burglar alarms as standard equipment. Onsite or silent alarms will deter against armed robbery and burglary and the cost varies.  Some owners have a combination of two or three different alarm systems installed that warn of different types of illegal entry and may also ring at the police department or the alarm company’s station.   

Many times, an owner will subcontract the services of a security patrol that adds extra assurance to their burglar-alarm system.  Sometimes, businesses that are located in the same building opt to share the cost of a burglar security system. You can also contact your local police department for advice in making your business site safe and secure.

Insurance and security can mean the difference in the success or failure of your business operations. I recommend that you be prepared ahead of time by being proactive so that you don’t have to be reactive and end up paying the supreme price. These are only a few risks that a business owner takes and if you want to learn more about how to start-up and operate a success business, call Dr. Pat at (315) 733 9848. 

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