What happens if…?
What happens if I have a car accident?
What happens if I get a letter from someone holding me responsible for damage to their property?
What happens if I turn on my computer, and I’m greeted by a hacker’s message, instructing me to pay bitcoin ransom in order to access my files?
The resilience of a business is often defined by the risk management systems that are in place. The risks that a business will need to manage fall, broadly speaking into three categories – Physical Assets, Liabilities, and increasingly, Cyber. Every business has some form of risk that will fall into these three categories.
Physical Assets – every business has them – a phone or a laptop, machinery or stock, premises or a vehicle. What does it mean for your business if these assets are taken out of the picture? Most businesses depend on some form of physical assets, and any loss or damage to these assets can interrupt the operation of the business, costing money. It’s worth thinking about if you can afford to replace your assets quickly, and how much is any down time going to cost your business?
Liability – you don’t actually have to do something wrong for liability risks to affect your business – an allegation is enough. All it can take is for a letter or an email, holding you responsible for damage to another persons’ property, and this will cost your business money – simply by defending your business from the allegation.
Cyber – We are becoming increasingly dependent on technology to conduct business, and with this comes risk from when the technology is disrupted – from ransom-ware attacks, to duplicate invoices with a new account number, to breaches of the Privacy Act – the implications of a cyber attack can be far reaching for a business. How long can you continue to trade if you can’t get into your system or backup files?
All businesses benefit from having a risk management plan which utilizes four potential strategies to manage risk:
- Avoid risk – Change plans to eliminate the problem
- Control/Mitigate risk; – Reduce the probability and/or impact through a proactive approach
- Accept risk – Take the chance of negative impact or budget for contingency
- Transfer risk – Outsource risk by way insurance
The role of an insurance broker is to provide advice on identifying business risk and recommending cost effective solutions to manage them. He or she can then advise you what risks should be insured, and then if you agree, canvass the insurance market to obtain the best insurance solution that is tailored to fit the needs of your business, at a competitive price.
It’s finding out your business’ individual risk appetite that makes a good insurance broker a valuable asset to your professional services team.
If you don’t know the answer to the question: “What happens if…” then you should consider seeking advice before something goes wrong.
Chelsea is passionate about the growth and development of the emerging Social Enterprise sector. Born and raised in Christchurch, she wants to support the businesses that are doing good for our communities. Our mission at Crombie Lockwood is to position your business to financially survive any insurable event. Chelsea would welcome any opportunity to assist you to position your business to become more resilient to the risks associated with doing business, and consequently support you to achieve your purpose.
Chelsea Smith
Insurance Broker
Crombie Lockwood
(03) 339 5268
Chelsea.smith@crombielockwood.co.nz
