5 Common Business Risks and How to Minimize Them

Help Safeguard Your Company From Unwanted Business Disruptions

The rewards of small business ownership come with their share of risks. Natural disasters, accidents and theft can lead to lost revenue, legal liabilities and big headaches. Fortunately, you can help protect your company by identifying those risks and taking steps to mitigate them.

Here's a look at five business risks and how you can help keep your headaches to a minimum:

    Risk #1: Business interruption. Fires and other unforeseen events can force vulnerable businesses to relocate or close.
  • Solution: Create a disaster recovery plan that includes data backup and recovery strategies, as well as plans on how to set up a remote location and alert employees to what's going on. Consider investing in business interruption insurance, which helps cover your operating costs and loss of income so you can help maintain payroll while you replace equipment and repair damage. This coverage typically provides reimbursement for up to a year of lost revenue. Learn more about disaster recovery plans at the Small Business Administration's website.
  • Risk #2: Property loss. Your business property needs protection from the unexpected, just as your home does.
  • Solution: Audit your physical locations and business processes to identify and address areas of vulnerability. Consider investing in a business owners' policy to help cover damage to company assets that results from fire, storms and other disasters. These policies are available whether you rent or own the building you work in.
  • Risk #3: Injury. Workplace injuries can result in medical treatment costs and lost productivity. They can also inflate business insurance premiums.
  • Solution: Educate employees about workplace safety and ensure that you have proper workers' compensation insurance in place. This insurance provides wage replacement and medical benefits to staff members who are injured on the job. It also protects businesses from legal complications relating to workplace accidents. All states require companies to carry workers' compensation coverage if they have employees who receive W-2 forms. In addition, your home state may have specific laws that your company needs to follow. The IRS website has more information.
  • Risk #4: Liability. Liability. Companies are at risk of lawsuits for accidental injury, libel or slander and other unanticipated results of day-to-day business.
  • Solution: Carefully designed business practices can help mitigate risks, but it can be difficult to guard against unknown future events. General, product and professional liability policies offer coverage for businesses that are exposed to specific threats. These policies offer protection against third-party insurance claims. Talk to your insurance agent to see what kind of liability coverage your company may need.
  • Risk #5: Security breach. In today's digital world, businesses can be instantly crippled by a loss of data or data theft.
  • Solution:Map a strategy to help protect your company data both on-site and remotely. If it would be difficult for your business to recover from a data loss, consider investing in data compromise and identity recovery insurance. This can help to protect against loss or damage to computer equipment, data storage devices, electronic information, software and expenses related to data recovery. Your insurance agent can help you find the right policy and determine appropriate coverage levels.


Discover how Allstate can help protect your company from common business risks. Find your local Allstate agent, call us at 1-888-322-3070 or click here to learn more.

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Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2013 Allstate Insurance Company, Northbrook, IL.

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