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Safeguard Yourself and Your Customers

In this article we discuss some of the risks that apply to both small and online businesses.
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© RMIT University 2017
Protecting yourself and your customers through insurance is a wise decision in today’s complex and technologically advanced market. Considering your insurance needs helps to identify the risks you and your business can or cannot afford to take.
Any small business will have a number of risks, however online businesses, have additional risks that traditional small business may not need to consider as high potential risk.
Some of the risks that apply to both small and online businesses may relate to:
  • Advice provided by staff where a client or customer has relied upon this information to make a decision that may cause loss
  • Servicing customers through the provision of goods where damage or loss could occur during transport
  • Public liability where a product may cause some form of injury or death
  • Technological risk around website hacking or hijacking where private and confidential information is taken in relation to the organisation and its customers.
Taking these areas into consideration, insurances can be classified into three general areas:
  1. Compulsory: worker insurances for compensation due to injury, accident or death.
  2. Essential: fire for the protection of assets; public liability to cover you from personal injury or property damage due to your negligence
  3. Other: professional indemnity, leasing, loss of profit, personal accident or sickness, goods in transit etc.
Case study
Jordan is thinking about her new destination wedding travel business and the potential to employ some staff within the first 24 months of launching her site, but she is also concerned about being the only person running the business for the first 12 months. She has a mortgage and she can’t be out of work and definitely needs to keep earning money to cover her living expenses.
Jordan also needs to think about her customers – what if something goes wrong, she is providing professional advice that her clients will rely on to make arrangements for their for their wedding and travel. It’s a big commitment and often a big financial outlay for her clients.
Discussion
What are some insurances or considerations Jordan will need to include in her business planning?
Post your ideas to the Comments area.

© RMIT University 2017
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