Three WAYS TO MANAGE YOUR RISK
An alliance of leaders working together for small businesses.
Accidents. Surprises. Losses. They all come with the territory of owning your own business. But there's no reason you have to be a "victim" of these unexpected losses, not if you take advantage of three key ways to help manage your risks.
1. You can finance risk
One approach to risk management involves purchasing enough insurance to transfer responsibility for losses to your insurer. Click here to learn more about insurance, an essential aspect of risk management.
2. You can transfer risk
Where appropriate, you'll want to shift the responsibility for risk to your lessors, vendors, subcontractors, competitors and even your customers. Here are some tips on how to attempt to transfer some of your business risk to others.
- Lease business property and equipment. Depending on the leasing arrangement, your property and liability risks may be assumed by the lessor.
- Use "just in time" delivery. If your business permits, and deliveries are not very time sensitive, a risk management technique that might prove useful would be to require vendors to store merchandise and materials at their sites until you need them. Or, if you are in the packaged goods trade, ask your supplier to drop–ship merchandise directly to your customers.
- Transfer risk to your customer. Your lawyer can discuss ways to transfer ownership and risk of goods that have been sold to a customer but which remain on your premises. Also, pay careful attention to your warranties to make sure they are designed to protect you.
- Consider "hold harmless" agreements. A "hold harmless" agreement is a risk management tool that is designed to shift legal and financial risk from you to another party. Consult your lawyer for advice regarding these types of agreements.
- Don't try to be all things to all people. Let your competitors take the chances on potentially dangerous projects or ventures.
3. You can control risk
Of course, there are some things you can't prevent like storms, power failures or accidents. But there are ways to address the likelihood something will occur, or the impact it will have on your business after it occurs.
USAA is acting as an agent through its insurance agency affiliate, USAA General Agency, Inc. or USAA Insurance Agency, Inc. The USAA Business Insurance Program offered through the agency affiliate is available only to persons eligible for USAA membership. The Hartford Fire Insurance Company and its affiliates provide the insurance for this program. All insurance applications are subject to underwriting to determine acceptability. Product availability and coverage may vary by state. Insurance descriptions are general in nature. Please refer to your policy for full disclosure of coverages, limitations and conditions.
This document outlines in general terms the coverages that may be afforded under a Hartford policy. All policies must be examined carefully to determine suitability for your needs and to identify any exclusions, limitations or any other terms and conditions that may specifically affect coverage. In the event of a conflict, the terms and conditions of the policy prevail. All Hartford coverages described in this document may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc.