How to Manage Risk in Your Business

Planning for the risks that will occur in your business is critical to your success. Here are some basic steps to help you make certain you have an adequate risk program in place.

To manage risk in your business:

  1. Write your business plan.

  2. Go through your business plan critically looking at every area that could involve risk, making a list of what areas you need to consider.

  3. Take time, preferably with others who know your business, to brainstorm all the possible catastrophes that might occur.

  4. From your lists developed in steps 2 and 3, decide what action or coverage is needed to handle that possibility.

  5. For those risks that can be handled by insurance coverage, determine how much and what type of insurance is needed.

  6. Choose a reasonable amount of insurance to cover those risks.

  7. Contact more than one insurance agent to get quotes on the insurance that is needed.

  8. Arrange for insurance coverage to begin before the doors open on your business, if possible.

  9. For those risks not covered by insurance, put together a contingency plan for handling each of the risks identified.

  10. Train all employees in what to do in any if any of these (or other) emergencies arise.

  11. Put your plan in a place where it can be located quickly, if needed. Have an extra copy in a safe location.

  12. Review your plan annually, including input from all employees.


  1. Common risks to consider are employee/client safety, theft/fraud, disasters,
  2. What is a "reasonable" amount of insurance varies from individual to individual depending upon how risk averse you are.
  3. You can lower insurance rates by taking high deductible levels.
  4. Even ecommerce websites need insurance.