How to prepare for unexpected risks: A business survival guide Previous item Christmas & New Year Break Next item Insurance and GST: some...


Most small business owners are born optimists. After all, why take the plunge unless you’re confident you can stay afloat? But positive thinking can only take you so far. To succeed in business and stay on course, you also need to think about what could possibly go wrong and seek the help of an expert.

All business involves risk. From natural disasters, such as fire and flood, to theft, or building works on your doorstep that disrupt your trade. It’s impossible to predict, let alone prevent, all future risks. But there are 4 key steps to take to reduce the impact on your business. Do it right and you won’t just survive, you could thrive.

1. Identify your risks.

The first thing to do is to compile a list of risks you could potentially face. It would be helpful at this point to tap into the experience of an insurance broker, a business mentor or your business networks.

Every business is different and so are the risks they face. For example, if you run a retail food outlet and rely on refrigeration, then a power outage could result in stock losses. Worse still, your customers could suffer from food poisoning. Or if you run an online business and your internet connection is down for hours or days, you risk losing business and customer goodwill.

As well as physical risk to your business property, employees or clients, think about potential disruption to the market you operate in and less tangible things, such as risks to your business reputation.

An insurance broker can work with you, to help identify your insurable risks. With this advice you can then make an informed decision to find the right cover to protect your business against the unexpected.

2. Managing risks.

Once you’ve identified your risks, it’s time to put in place some strategies to manage them. The best time to consider your risk management strategy is when you draw up your business plan. If you haven’t already done so, download a template here. Don’t forget you will need to revisit your risk strategy and update insurances as your business grows.

Just as there are many ways to bake a cake, there are many ways to manage risk. Find some suggestions to get you thinking on the government’s business portal.

You can also cost-effectively reduce some risks with simple actions, such as backing up your computer data, installing smoke alarms or providing your staff with safety training. Likewise you could also consider outsourcing tasks, such as bookkeeping or computer networking, to reduce your risk of costly errors or malfunctions.

You can also buy protection against many business risks through insurance. Some insurances are required by law, such as workers’ compensation to cover injuries to your employees or professional indemnity for certain occupations. Others simply make good business sense, such as management liability. Speak to your insurance broker for tailored advice.

3. Cover all bases.

Most people understand the need to insure their business assets, such as buildings, contents and motor vehicles for events such as fire, theft or damage. But business interruption insurance is arguably just as important. This helps cover any loss of revenue if you are prevented from trading due to an unforeseen event. It also provides cover where you cannot access your premises due to damage to adjoining premises.

Even if you are working from home, you may need to consider public liability insurance and professional indemnity insurance. These offer protection if a client is injured on your home turf or takes legal action against you as a result of your professional advice.

4. Seek advice.

Steadfast insurance brokers have in-depth knowledge of insurance products and can suggest a business insurance package tailored to suit your business. This is often more cost-effective than putting together a patchwork of single policies that could leave you exposed.

Now you’ve taken the plunge and started your own business, don’t jeopardise all your hard work by failing to take account of the risks. With a bit of thought, and help from experts, you can put a plan in place to help you bounce back if disaster strikes.

Contact a Steadfast insurance broker today, who’ll be able to help you and your business prepare for the unexpected risks.


Phone: (09) 525 3232
351a Great South Road. Ellerslie
Auckland 1051