Your small business is growing fast. Do you have a plan in place to manage the added risk that comes with more customers and more employees? There’s nothing quite like an on-the-job accident, a careless mistake by you or an employee or a legal claim from a disgruntled customer to wipe out even the healthiest of companies.
Here are some steps you can take to help keep your risks under control:
Get it in writing. Many small businesses operate without written contracts. But as you grow, informal agreements can lead to legal claims and lawsuits. Contracts that detail the type of work your company will provide to customers, the timeline the work should be completed and the fees that will be charged are crucial. Communicate regularly with clients and provide updates on important projects.
Make it easy for customers to reach you. Do you make it easy for customers to reach someone at your company when they are unhappy? The longer it takes to resolve a problem, the greater the likelihood a customer may resort to a legal claim. Immediately address any problems. It’s also always a good idea to document your interaction with customers.
Set up policies. As a business owner, you’re responsible for setting the policies under which employees must do their jobs. Creating company policies isn’t fun. But without them, you could face greater liability when something goes wrong. In a number of growing companies, for example, employees are engaging in risky activities – such as texting while driving. If an employee who is texting is involved in an accident, it could be argued that the employer didn’t do enough – or anything at all – to prevent employees from driving dangerously. That’s why you should clearly state what is acceptable on-the-job behavior and what isn’t.
Don’t make promises you can’t keep. Sure, you want to make sure a competitor doesn’t get the big contract. But take extra care anytime you make promises you may not be able to keep. Make sure you think about all of the things that are out of your control or could go wrong before promising work will be completed in a particular way or on a specific date.
Be properly insured. Some companies skip important coverages, such as errors and omissions (E&O) insurance, to save money. But some types of insurance are much too important to skip. For example, many businesses in areas that are at high risk for floods fail to buy flood insurance. Why? Many think their standard business policies will cover all disasters.
Take some time to get to know your insurance agent and your policies so that in the event of disaster, you’ll have the right amount and type of insurance to get you back on track. Questions? We are here to help.