Risk Management for Business
There are many crucial aspects to running a business. One that often gets overlooked, especially for small to mid-sized business, is risk management.
Broadly speaking, “risk management” includes the following steps:
- Determining the possible liabilities of your business,
- Evaluating potential costs associated with those liabilities, and
- Implementing strategies to reduce risk and protect assets, both personal and business related.
Business owners that do not engage in a risk management program can hurt their bottom line, or even worse expose their enterprise and family to financial ruin. Fortunately, those dire consequences can be avoided utilizing these strategies –
Review of Current Liability Coverage
With the business environment changing so rapidly these days, your insurance may have gaps in coverage, or contain unintended exclusions. In addition, it may be possible that your business has grown so rapidly that your company is now underinsured. Cambridge, with on staff legal counsel, can review your current coverage and identify areas where your insurance program may be deficient.
Mitigating Risk Through Document Review
Most business owners would be surprised to find out that some of their corporate documents do not meet legal standards or have not been properly executed. This could include things as simple as a failing to maintain corporate minutes, or signing and dating contracts and agreements. However, there may be more complex issues that you may want a trained attorney to review, such as covenants not to compete, confidentiality agreements, buy-sell agreements, and employment contracts. Most financial advisors do not have the credentials to give you that kind of advice, but we do.
Providing a “Safety Net” Through Key Man and Disability Insurance
Many small businesses rely on the efforts of a few key individuals that are integral to the success of the company, including the owner/manager of the operation. For instance, if a key person were to die unexpectedly the company could lose a substantial source of revenue. There are solutions that will mitigate that risk. Likewise, if an owner or officer becomes sick or disabled and is unable to perform his job, he or she may be subject to a financial hardship that jeopardizes the survival of the business. Perhaps, a group or individual disability policy is the answer. Cambridge can advise you on what steps to take to make this type of coverage tax deductible.
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