Let’s face it, running a small business is a risk—and not just in a bad economy. Every day different challenges threaten to undermine a business owner’s efforts or sap his investment.
Some risks can be avoided; others, like natural disasters, can’t. Rupali Shah and Storm Wilkins, attorneys with the firm RPS Legal Solutions, LLC in Philadelphia, provide legal advice and representation of their business clients. They also help franchise owners manage risks and prevent little problems from destabilizing a business.
“Business owners need to be more analytical when it comes to understanding the risks that can impact their business,” said Wilkins, who also holds an insurance training designation. “Whether it’s a slip-and-fall accident or a tornado, there are certain risks all businesses face.”
RPS is in the process of creating a training course to help owners of hospitality and fast food franchises better manage risk. Some of the information is pretty basic like posting contact numbers for all emergency personnel—not just police and fire but also snow removal or flood mitigation. And, all managers should know the name and contact info for the company’s insurance company.
According to Shah, in some circumstances, insurance companies can deny a claim or refuse to pay a settlement if the business owner has not met all the conditions of his policy. “Owners have an obligation to report any incident to their insurance company, in the event there is a claim or a lawsuit against them.” In fact, Shah said, many business owners don’t even know how to submit a claim to their insurance company. Business owners should consult with their agent or attorney in the event their insurance company denies coverage for a claim which they believe should be covered.
Insurance is one important risk management tools but there are others business owners must use to help avoid and mitigate risk. Perhaps the most important, according to Shah and Wilkins is employee training.
“Business owners risk exposure to lawsuits or fines if they do not make sure their employees are trained and supervised. When owners are off-site they are more exposed to employment liability cases,” Shah said. “What if you have a defective piece of equipment and no one tells you until there’s an accident? That puts you in a position of risk because the employee can claim you ignored the problem.”
Business owners also face exposure to fines and/or lawsuits if they are not in compliance with local and federal laws and regulations—from health and hygiene to sexual harassment. Shah says having policies in place to train employees and educate them about changing laws can help insulate owners from risk.
RPS also advises business owners to maintain a cash reserve to cover unanticipated expenses. Many business owners have all their cash tied up in operating costs and debt service and that can create difficulty—especially when economic factors cause business to dip.
Some risks can be avoided; others have to be managed. In either case, business owners need to have plans in place and a trusted team to help them cope with even the most unexpected risk.
For more information about RPS Legal Solutions, LLC go to www.rpslegalsolutions.com