Sherry Hersey, VP Marketing Development at Travelers Small Commercial, tells us about the the importance understanding risk and having a "Business Continuity Plan" for women in business.
"As women continue to launch businesses at increasing rates (according to the U.S. Department of Commerce, the growth in the number of women-owned businesses was roughly two times faster than growth in men-owned businesses between 1997 and 2007), it is critical that women entrepreneurs understand the importance of insurance and proper planning to protect their businesses in the face of an unforeseen event or disaster.
Understanding the Risks
According to a Travelers survey recently conducted at a National Association of Women Business Owners (NAWBO) conference, business owners prioritize activities related to marketing and sales, as well as attracting and retaining employees, over efforts related to protecting their businesses against insurable risk. Moreover, 82 percent of women believe they are extremely or somewhat confident that their business is protected against insurable risks that can result in significant financial losses. However, less than half (48 percent) actually have a "Business Continuity Plan" in place. This is alarming given recent SCORE data suggesting that 75 percent of businesses without a Business Continuity Plan close their doors permanently within three years of a disaster. The lesson? Growth is important, but neglecting to protect the hard work and investment made in building a business can mean disaster. In fact, one NAWBO conference participant even said “We put a lot of energy into planning for success, but we don’t think about planning to survive disaster.” Now is the time to change that.
Insuring the Insurables & Putting the Plan to Action
Understanding the various types of insurance coverages available to small business owners is a critical component of disaster preparedness. Whether a business is home- or office-based, small business owners have options to invest in flood, property, umbrella, and business interruption policies as well as a traditional business owners policy or “commercial multi-peril” policy. These types of insurance coverages coupled with a "Business Continuity Plan", can offer the protection needed to help a company survive a disaster. A Business Continuity Plan is a set of actionable guidelines designed to get a business operational after an unexpected event. The process includes generating a threat assessment, identifying critical functions, conducting business impact analysis and testing the plan to make sure it is effective. To learn more about building Business Continuity Plans, look to agents, brokers and insurers like Travelers, for example, which offers its policyholders a variety of risk management resources and tools.
Integrating the Plan into Your Business Model
It is important that women business owners add risk management into their ongoing business strategy, taking into account short- and long-term risk exposures. This should include holistic management strategies, from Front Door Management practices (making sure the right employees are hired from the get-go via background checks and other hiring procedures) to databases with employees’ and service providers’ contact information. These plans are most effective if they are communicated regularly and effectively to employees. Travelers is dedicated to helping women-owned businesses thrive by helping them to proactively safeguard against potential risks. Visit our risk management resource for all business owners to help get the conversation started."
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