For business owners — both those who have just taken the plunge to start one and those who have been running one for years — the challenge is real. It is tough enough having to turn in profits with rising costs in a fast changing economic environment, on top of the myriad of risks that can affect the profit and loss of the business.
Facing unfortunate incidents in the course of running a business is a scary thought, especially when it involves things like property damage, compensation claims and liability suits. Much as a business owner can be in denial about the probability of any accidents striking the enterprise, losses and claims could happen, and possibly end up seriously costing the business.
You may think that such incidents will never happen to smaller companies, but unforeseen circumstances are a reality that often cannot be avoided. Here are some examples that can really puncture a hole in your business wallet:
1. Theft and burglary
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Crime does not discriminate. Burglary and theft can be detrimental to any business, regardless of the industry, because you’re dealing with loss of money, merchandise and other valuable items. If a break-in occurs and your business is found not to be properly secured with alarms and electronic security systems, your claim could be rejected. Prevention is indeed better than cure, but sometimes crime cannot be avoided, and a single case of theft can really derail your business operations and cash flows.2. Injury from handling machinery or tools
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You may assume that occupational hazards like being struck by tools or collision with machinery only happen to heavy industrial jobs like construction and manufacturing. However, many businesses depend on machines and equipment to function. Any time employees engage with heavy or bulky objects, there is a chance for accidents to happen. Restaurant employees often perform actions like lifting, unloading, and carrying items which are not only heavy but of high temperature. Retail clerks and other workers working in delivery and installation are also not spared when they complete tasks requiring the use of drills and screw guns, or climb up tall ladders during a stock take. If your employees sustain an injury at the workplace, you as their employer will most likely have to bear the medical costs.3. Fires and explosions
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These unforeseen hazards are probably the most common accidents that can happen to restaurants and food chains with kitchens, gas tanks and stoves like what occurred in the case in Midvalley Megamall earlier this year. Other than that, hair and beauty salons equipped with flammable liquids and electrical equipment could also face combustion incidents or electrical fires. If a fire transpires, it can be a huge blow to your business as you may need to shut your doors for repair works that could take up to weeks or even months. This means that your business will not be generating income for an extended period of time, despite existing running commitments like the payment of staff salaries, rental of premises and bank loans.4. Natural catastrophes
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Weather upheavals like storms and floods are common in a tropical country like Malaysia as we have seen this year in various states. When these incidents happen, businesses fall victim to property damage which require repair works and business interruption. Severe catastrophes may even cause businesses to incur complete loss of property and this is the ultimate nightmare for any business owner.5. Liability to third parties
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For businesses that deal with customers on a daily basis, slips and falls are one of the most common commercial hazards. A customer could slip and fall due to wet floors, uneven steps, oily surfaces, loose mats, or even unattended cables. Such incidents at your premise could trigger public liability suits that can turn costly. Not only will your business be financially hit, your reputation could also suffer a negative backlash if a third party is hurt at your premises.6. Vehicle accidents
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Malaysia has one of the highest road accident rates in the world. This statistic increases especially during festive seasons when goods and services are delivered to your customers via your company’s trucks, vans and lorries. And let’s face it, these deliveries are often rushed because your drivers are chasing time to meet tight schedules. If a crash happens, the injured employee will make compensation claims from none other than the business owner, who is also saddled to fork out more money to repair the company vehicle.7. Employee health issues
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Among the key stakeholders who keep your business going are your employees. Your staff needs to be in tiptop health to ensure your business operations run smoothly. If anyone falls ill, your business could be impaired, resulting in remaining employees having to work longer hours and even overtime. Manpower when stretched can cause the quality and standard of your goods and services to drop.Despite implementing all kinds of preventive and safety measures explored in our previous article, some circumstances are still difficult to evade in business. So what can you as an owner do to protect your business from unavoidable yet potentially expensive claims, and save yourself from all the unfortunate bills you may find yourself having to pay off?
A step in the right direction calls for having proper insurance coverage for your business. And with this, AXA SME Insurance is here to help with free consultations to gauge all your business risks and how to protect against them. AXA SME Insurance offers end-to-end protection for all small to medium-sized businesses, in helping to mitigate risks, protect their property and business income, as well as protect the owner and the people employed by the company. With all these areas covered, business owners can rest assure of returning to operations faster with minimal financial disruption whenever catastrophes happen.
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