Risk management for business owners and managers is of the utmost importance. You registered your business, found a location, carved out a niche for yourself, hired employees, and got to work. However, you might have overlooked risks that could make your business difficult to manage or even financially unsound.
Learning how to identify and manage these risks is the only way to ensure that your business is safe, serves your customers, and functions as a lovely place for your employees to work. Even though concern in the business community surrounding the COVID-19 pandemic fell to 22 percent in 2022, there are a myriad of other issues that your business must address.
How to Identify Business Risks
The first step in managing risk is a bit of radical honesty. You must be honest with yourself about how your business functions, the obvious risks that are at play, and how you will address those risks.
You may also want to speak with an insurance agent to complete a broader risk assessment. Going forward, you can use this assessment to better understand the level of insurance coverage you need and steps you should take. If your business grows, your coverage should expand. If you add new divisions or departments, your insurance—and risk assessment—will change.
Physical Risk Factors
As you search for anything that could pose a potential risk, remember that physical risk factors are not always obvious. Common physical risk factors include:
- Fires
- Explosions
- Building or structural collapses
- Being struck by an object
- Injuries caused by machines or materials
In an effort to mitigate the risk, your employees should understand procedures for handling accidents or injuries, know how to exit the building in the event of a fire, and the facility should have a fire alarm and sprinkler system installed.
Moreover, you should train your staff how to use delicate machinery, etc. Renew that training every six months, once a year, etc. You can also provide safety equipment, gear, and clothing to prevent injuries.
How to Manage Hazardous Materials
As part of the risk identification process, you must create a protocol for managing hazardous materials and chemicals. Train your staff routinely, ensure that everyone understands how to handle emergencies, and provide all the necessary hazmat gear.
Common hazardous materials include:
- Acid
- Gas
- Toxic fumes
- Toxic dust
- Harmful filings
- Dangerous liquids
- Hazardous waste
You cannot mitigate the risk of working with these materials unless your staff is completely comfortable in the situation and equipped properly. To that end, if employees wish to opt out of handling these materials, they should be allowed to do so. You might even go so far as sequestering these materials in a highly-secured, separate part of the facility.
Location Hazards for Businesses
Location hazards for businesses must factor into your risk management plan, but these things are often overlooked because, if we’ve worked in the same place for a long period of time, we grow accustomed to hazards that are still a massive liability for the business. You might not bat an eye at a hurricane, but your insurance agent will.
