Risk Management 101 for Small Business Owners

The Uhl Agency strives to provide comprehensive insurance programs for each of our clients – individuals, families, and businesses alike. We also understand that no two accounts are the same, especially in the small business world, and that a comprehensive insurance plan is just one component of a successful risk management program.

Business insurance is essentially a way to finance the risk of a business, as an insurance contract provides funds to pay for losses that are covered by the insurance policy. However, there are additional components of the risk management process and we would like to review a few of the basic principles of risk management:

  • There is no such thing as an uninsured loss, as uninsured losses are retained losses. In short, if your business suffers any type of loss (physical damage to your buildings or autos, a workers’ compensation claim, loss of a key employee, etc.), you will have to assume either all or part of the loss. If you do not have insurance protection for the loss you experience – and not all losses can be insured – then you are retaining all of the loss. If you have insurance to cover the loss, then you might only have to retain a portion of the loss in the form of a deductible.
  • Don’t retain more than you can afford to lose. The Uhl Agency will be happy to review your exposures with you and can assist with detecting exposures that aren’t adequately insured or even insured at all. Coverages such as Business Income from Dependent Properties, Utility Services Direct Damage, and Third Party Employment Practices Liability might sound foreign to you but could potentially end up protecting you against a six-figure (or higher) loss. By not properly evaluating and addressing your risks, you are essentially deciding to retain any potential losses that result from them.
  • Don’t treat insurance as a substitute for risk control. Insurance policies cover losses that aren’t excluded in the policy contract but a rash of claims that can be reduced or avoided through risk control measures will lead to higher premiums for you – or worse – cancelled coverage. Implementing a driver safety program, an information security program, or simply having a loss control representative come to your business to review potential pitfalls can save you a lot of money and time in the long run.

We will be happy to further discuss these concepts with you as well as conduct a complete review of your current business insurance program. Contact us at insurance@uhlagency.com or by phone at 937.434.9090 to get started.