As business owners, we sure do have a lot on our plates.
Balancing the day-to-day of running a business with high-level strategic and growth activities can be enough of a challenge by itself. However, things can go completely off kilter if something goes wrong, and you don’t have the proper protections in place.
A dispute or issue can turn things upside down very quickly, so it pays dividends to ensure you’re taking the right precautions to mitigate your own risk. Below are 5 simple tips for ensuring your business is covered.
1) Choose your insurances
The need for the right business insurances can’t be stressed enough. But when it comes to choosing which ones are right for you, there are the “must haves” for any business owner, and there are those that are a little more specific to your field.
Professional liability insurance is the number one “must have”. Property insurance should be purchased if you own your work residence, workers’ compensation insurance should be purchased the moment you employ someone, vehicle insurance if you have company cars, and product liability insurance is great if you sell, well, products. These are all fairly intuitive.
You should then consider your industry. As an example, if you’re a tradie who works outdoors, public liability insurance may be key. If you provide advice of any nature, professional indemnity insurance would be the way to go.
2) Take advantage of industry bodies
One of the best steps a professional service provider can do to mitigate risk is to join an industry association – as a financial advisor, we turn to the Association of Financial Advisors. Industry associations help protect their members by providing guidelines, education, templates, tips and advice based on extensive experience and expertise in the field.
3) Don’t forget the government
The Australian Government itself is a fantastic resource for small business. Government resources can assist you in understanding relevant laws, such as The Corporations Act 2001. They can also help you in the case of claims with dispute resolution services. Staying up-to-date with the latest resources will keep you informed about any updates to legislation and services that may directly impact or help you.
4) Get everything in black and white
It’s always prudent to get as much as possible in writing, such as agreements, contracts, requests, promises, and services rendered. This ensures full transparency for everyone involved, avoids miscommunication, and prevents any problematic “he said she said” situations.
5) Leave nothing to the imagination
Building upon the previous point, it’s crucial to be completely forthcoming regarding the exact service that you provide for clients. This means there will be no assumptions about what you do and, more importantly, what you don’t do, reducing any confusion on the part of both parties. And very importantly – don’t be tempted to overpromise just to win a client! You’ll definitely regret it if you can’t deliver.
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By Katrina Haskew, Managing Director of Leading Advice