How important is a business risk assessment?
Taking the time to consider what risks have the potential to throw your business off track, could mean the success or failure of your company further down the road.
Mistakes and accidents will invariably occur and can be very costly, especially when your business is small. To help mitigate this risk, you should undertake a business risk assessment.
What is a business risk assessment?
A business risk assessment, as the name implies, is the process of identifying the key risks your business faces. These risks will be specific to the operation of your business, or more generalised to your industry.
The key element of a business risk assessment is understanding what the material risks your business is exposed to, before putting in place the measures to reduce, manage or transfer.
To undertake a risk assessment, first consider general risks such as market forces, supply chain problems, etc. How likely are you to encounter these? Whether you are more or less likely, they are always going to be a possibility.
Then there may be further business risks specific to your company. If, for example, your business involves the storage of volatile chemicals for a production process, that automatically puts your business at a higher risk of accident than others.
Completing a business risk assessment will help you understand the potential risks your business faces, and help you identify what you can do to solve these issues before they become serious problems.
Understanding your business risks
If you are just about to start trading, or have just incorporated, you need to be aware of the business risks you face and what you can do to mitigate their potential fallout. Risk management is the path to your business being able to maximise both opportunities and growth in a sustainable path to profitability.
Risk professionals are always available to help guide you through the risk assessment process. They can identify the key business risks, and then they help you to list them in a logical and orderly fashion based on the likelihood of your business experiencing them.
With that done, they can help you to understand the key practices required to mitigate these business risks, and how you can best protect your business in the event they actually come true. Outsourcing to a risk assessment professional is a great way to take a different perspective on your business.
What do you do when you've identified business risks?
When you’ve identified your specific business risks and sorted them into an order of suspected relative likelihood, you can then begin to think about what action you can take.
You can't protect yourself against market forces, for example, but you can be proactive when it comes to ensuring your property is properly insured. You can ensure your working procedures are as safe as possible, and that any hazardous materials you use are kept as securely as they can be. Ensuring proper safety practice is understood and observed is always invaluable.
Being proactive is always better than waiting for an accident to occur and simply dealing with it - depending on what the accident is, the fallout could be severe. It could be anything from your business having to unexpectedly close for a day, right through to your premises being irreversibly damaged.
Getting the right business insurance
Every business is different, so has different business insurance requirements. That means when you're shopping around don’t just focus on just the cheapest cover available, you need to make sure you purchase a policy tailored to your requirements.
Adequate insurance is one of the most important ways your business can help protect itself from unforeseen risks. Get indemnity™ business insurance is able to offer tailored and cost-effective solutions designed for your company’s needs.
There are a range of business insurance covers available, covering everything from professional indemnity insurance
to financial protection for your equipment being damaged or stolen. You’ll need to consider your premises, your operations, your employees (if you have any), and the services or products you provide. A professional insurance broker can assist you make the right decision concerning which cover to buy.
Getting the right level of business cover is one of the best things you can do to protect your growing business from the risks it faces. Your business insurance will offer you peace of mind that if the worst should happen, you have a financial support available.
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This guide is for information purposes and based on sources we believe are reliable, the general risk management and insurance information is not intended to be taken as advice with respect to any individual circumstance and cannot be relied upon as such.