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 or a legal claim to create hardship for even the most successful 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, including those involving safety or human resources, 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.
Make sure your business is properly insured. Some small 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 don’t carry enough liability coverage, leaving them vulnerable to costly lawsuits. Others don’t realize that their basic business policies don’t cover all types of adverse actions and situations.
Are you effectively identifying and managing risks to your company? Is your business adequately insured? We can help. Give us a call: (859) 781-0434.
