As a small business owner what is important to you is your hard-earned money. As you are positioned for growth, continuity of your operations should be of utmost importance to you.

In such a situation, it is prudent to be aware of the business environment and the potential risks that you are exposed to. While some business owners consider themselves to be risk takers, it’s not a sound business practice to let your operations be exposed to risks, especially when the risks are known to you.

In Alberta or for that matter all provinces in Canada, small businesses are typically exposed to 5 risks:

1. Liability risks
Commercial General Liability (CGL) insurance provides coverage for damages that your small business may be found liable for. These damages are typically caused by bodily injury or property damage to third parties, including your customers when they are either at your business premises, or when you and your staff are conducting business off-site.

For example, a customer might fall in your business premises due to some repair work being done on the floor; or your workers might accidentally damage a customer’s property. Both these scenarios can cause a hole in your pocket. However, if you have the right CGL insurance coverage in place, then your business will be protected in both scenarios.

2. Property risks
a) Business premises
Commercial property insurance provides you coverage against property risks. Small businesses typically operate from business premises, store fronts or a workshop. In these premises there might be undetected hazards and an accident can happen unexpectedly.

For example, a faulty electricity outlet could cause a sudden fire that could damage your equipment, inventory, furniture, electronics, and other essential items. Repair and replacement costs for these items could be substantial and could cause a dent on your cash flow.

b) Home Office
If you are running your business from home, you will be required to obtain home-based business insurance to protect yourself against any business-related claims. This is because most homeowners’ insurance policies don’t automatically cover business-related damages or losses occurring in a home office.

To take this cover, you will need to list out your assets and determine how a loss might affect your business. This will enable you assess what type of coverage you’ll need to repair your property and replace your possessions, in case of an event.

3. Business interruption risks
Business interruption insurance protects your business against unexpected risks. For example, an unexpected storm or fire could cause damage to your property and equipment and as a result you might be forced to temporarily close your business for repairs.

This would be big loss as your income will be affected. In such an event, business insurance helps by covering operating expenses and lost income while your business is temporarily closed for repairs.

4. Cyber security risks
Nowadays cybercriminals are mostly targeting small business owners as larger enterprises have the financial muscle to deploy latest and best cyber security solutions.

As small business owners typically don’t have sophisticated cyber security solutions deployed, they are more vulnerable to risks. Secondly since their budgets are also low, the best available option for them is to obtain a cyber risk and data breach insurance coverage, as well as take preventative measures to reduce Internet-based exposure.

5. Legal risks
As most small business owners are busy in their day-to-day work, they don’t have the expertise to evaluate details of each and every contract that they might be exposed to, and as a result might sometimes overlook the fine print, or may make mistakes.

In such situations legal expense insurance helps business owners protect themselves from legal suits or legal action that might be initiated against them from their suppliers or customers.

Business insurance needs of an organization vary from company to company. Small business insurance in Alberta is provided by many insurers since it is a key component of every business plan. As a business owner, it is worthwhile to understand these risks, since only by taking timely and adequate cover can they take steps early on to manage the risks and protect their property and possessions when disaster strikes.