You must be vigilant and aggressive about defending your business. As the leader and captain of your business, you must have the foresight to develop a protection strategy preemptively… before you need it and before it’s too late.

You wouldn’t go rock climbing without safety gear (at least I hope not). Perhaps you wouldn’t go at all, under any circumstances, but if you did, you’d bring gloves, ropes, a harness, cams to secure yourself to the rock face and probably even a helmet. Of course, you’d want to make sure this safety gear was in great condition and working properly before you began the climb. And you wouldn’t go alone either. You’d have someone watching out for you. That just makes good sense. It’s wise, sane behavior. Why gamble with your life when it’s unnecessary? Why risk a crippling injury when there are tools to protect you and keep you safe?

I’m often surprised that people who take the recommended precautions in physical activities don’t bring the same logic to their financial activities. If you pay attention at all, you’re aware that, as a business owner, you face some degree of risk… more now than ever before. But I watch many intelligent, prudent, otherwise sane people taking enormous, irrational risks with their businesses.

To their credit, most don’t know they’re doing it. It’s not that they’re ignorant or foolish. Most of the hazards lay hidden from view. There are no flashing lights or loud speakers proclaiming their presence. And they’re not immediately obvious… until it’s too late. You can’t block the blow you didn’t see coming.

Let’s face it. A lot can go wrong

And just about anything can cost you your business – and your future – if you’re not prepared. What if a client suffers a large financial loss due to acting on your advice or because you missed an important deadline? What if you client’s private information (SSN, credit, finacials, etc.) is compromised?

There’s no shortage of potential disasters facing your business: fire, flood, theft, equipment breakdown, loss of key financial records, lawsuits from disgruntled or injured customers and even lawsuits from former or current employees.

You don’t need to be a millionaire to be sued like one.

You don’t even have to do anything wrong to be named in a lawsuit, and even if it’s bogus, you still have to pay to defend yourself in court. Good attorneys don’t come cheap. The important question is: If you find yourself faced with a hefty lawsuit, would you prefer to have your insurance pay for it, or would you rather just pay for it out of your own pocket? Would a $30,000 lawsuit put a strain on your business? What about $50,000? $100,000? $1 Million?

Home-based businesses are not exempt from risk

If you are a home-based business, you are just as susceptible to risk as other businesses, and you may think that all you need is a homeowners policy to protect you. A typical homeowners policy may provide a small amount of coverage for business property (typically $2,500 or less), but NO coverage exists for business liability. In fact, most homeowners policies specifically exclude business liabilities. Even if you don’t have any employees, and you only work part-time, you still face liability risks.

In a perfect world, you could focus all your attention on growing your business and not worry about the risks, but there are simply too many risks to ignore. You must address these risks head-on by developing a proactive risk management strategy that makes sense for your business and your budget.

Matt Hall
Merritt Hall Insurance
(317) 247-7737
mhall@merritthall.com