Find out what are the types of business risks and how they can affect your plans, but also what you can do to secure your business, your team and even your future.
No business is safe, and if you’re just starting out with the hope that problems and incidents will get around you, you’re likely to face extreme situations that can jeopardize the continuity of your business. We can help you identify what types of risks can affect your plans and what you can do to secure your business, your team and your future.
Business risks can affect all fields of activity, it happens suddenly, unscheduled and can cause significant damage, from material to human, especially if you are completely unprepared for such an event. Here are the main types of business risks and our suggestions on how you can reduce the negative impact on some of them.
Sometimes the dangers come from within the company – the management or the internal context creates situations that expose the business to various risks.
The financial risks that can affect your business can vary, for example the credit granted to the clients or the credits accessed by the company; In these cases, fluctuations in interest rates can pose a threat, as well as an inability to repay, which could create a liquidity risk. Making adjustments to your business plan can help you avoid cash flow damage or unexpected losses.
Commercial credit insurance protects you financially against the risk of non-payment that may occur in commercial relations with customers in Romania or abroad. For example, if you provide goods or services to other companies with term payment, commercial credit insurance can protect you from losses if customers stop paying. This situation may be the result of insolvency or may be caused by external causes, such as economic or political problems.
The operational risks posed by the human factor are not to be neglected. Although mistakes can happen, when we talk about the activity of a company these mistakes can have serious consequences, such as – injuring employees, damaging equipment, making products or performing services that do not meet technical or quality standards and so on. It is a risk that you can reduce by anticipation and insurance. More exactly:
- Anticipation translates into working procedures for each department, regular training sessions for employees and their involvement in the process of risk identification and preventive or corrective control. Next, you can make action plans; it is important for employees to know how to react in the event of an incident to minimize damage.
- Taking out insurance to receive financial support in case of unexpected incidents. Groupama can help you with products such as:
- General liability insurance that covers situations where material damage or personal injury is caused to third parties – customers, employees, suppliers, etc.
- Professional liability insurance that helps you in cases where you cause financial damage due to omission, error or professional negligence.
- The civil liability insurance of administrators or executives provides you with financial support to remedy the problems caused by the uninspired decisions of the people in management.
- Group accident insurance provides financial support for business continuity – in case of injuries, this policy takes care of medical costs.
Reputation risk can affect you to a greater or lesser extent but there is always the risk that an unhappy customer, a defective product, negative articles in the press or a dispute will have a negative impact on your reputation. In addition, social media has amplified the risk of reputation. To avoid this risk or to minimize a potential negative impact, a reputation management strategy is needed to regularly monitor what is being said about the company, online and offline.
There are a multitude of other operational risks that can have both internal and external causes, or can involve a combination of factors that can lead to significant losses or even the disruption of a company’s business. Unexpected events could be: a fire that destroys the business, an operating error that damages or shut down an equipment, a server outage caused by technical issues. Whether it is human error or technical failure, these operational risks can adversely affect the business in terms of money, time and reputation. You can address each of these potential operational risks by:
- Employee training and a business continuity plan with proactive measures to ensure that important operations are not affected or, in the event of an interruption, can be resumed as soon as possible.
- Taking out insurance:
- Insurance for buildings and goods that provide you with financial support to overcome incidents more easily and repair the damage caused: Insurance of fire and other calamities that may affect your space, equipment, stocks of goods, raw materials; Insuring accidental damage to machines and equipment that provide compensation for damage to the equipment with which you operate.
- CASCO insurance
Technological risk arises as a result of the speed with which technology evolves. In a dynamic context, the technologies and equipment used play an important role in the competitive market, or can be a competitive advantage and the company’s equipment must keep up with the times, as well as the training of employees who use them.
You can address this risk by periodically allocating a procurement budget to update the company’s facilities, along with an employee training program. Do not forget to provide the insurance of electronic equipment, especially if the company’s activity is largely based on them. If you choose an insurance from Groupama you will be compensated for damages caused by numerous risks such as – operating errors, theft, fire, voltage variations, floods and others.
Changes that take place outside the company – at the economic, political, legislative, social and even weather changes – can have negative consequences for a business and we assimilate them as external risks.
Economic risks Although they are outside your sphere of influence, in order to be able to identify both the dangers and the opportunities that may arise, it is important to follow the changes and trends specific to the field of activity.
Political risk is generated by changes in the political sphere that often affect the business environment and change the rules of the game. In the face of political risk, which is unpredictable, the best option is to adapt and identify solutions to move forward.
Legislative risk arises due to the multitude of laws that must be observed and regulations that must be implemented in the course of business. For example – the protection of personal data, the provisions relating to consumer protection and others, which differ from one field to another. Failure to do so may result in considerable fines and penalties or even termination of employment. It is important to follow the legislation in the field in which the company operates and you can even seek the assistance of specialized consultants.
Labor risk is a risk that affects a variety of areas of activity – lack of skilled labor is a problem for many companies that fail to recruit all the staff they need. And a shortage of labor can lead to low productivity, delays in delivery and even accidents or errors. A good recruiting strategy can help you cope better with the situation and attract the specialists you need.
In order to attract them to your company, it is important to offer them an attractive salary package, but also a series of benefits that weigh a lot in making a hiring decision, such as:
- Groupama’s private health insurance offers employees access to quality medical services that cover the prevention component but also the diagnostic one.
- Group life insurance provides financial protection to employees in unfortunate cases of accidents leading to hospitalization and medical interventions, temporary incapacity for work or even death.
- Travel insurance for employees
The risk of catastrophes in the context of current climate change is growing. Nature can cause a lot of damage when it is unleashed – earthquakes, floods, landslides. In addition to these, businesses are also threatened by various accidents – fires, explosions that can be caused by human error, technical failures or a combination of factors out of control.
- If you choose a fire and other calamity insurance from Groupama, you will be compensated if the business is affected by numerous risks such as – fire, explosion, flood, earthquake, vandalism and others.
- CASCO insurance
The cyber risk is growing. Many sectors are dependent on digital technologies to conduct their core business and this exposes companies to cyber threats. For effective risk management it is important to implement security solutions, fraud prevention and detection tools and to educate your employees and customers on how to avoid or detect any problems.
What types of risks is your business exposed to?
Whether you have a production unit, a boarding house, a car service, an architecture office, a construction company or an advertising company and even if you do everything by the book, potential risks can turn into extreme situations affecting your business. You can’t predict them but you can be insure!
Groupama is here to help you – we take over the financial worries caused by risks and offer you support for securing the continuity of your business activities. Our offer includes complex and flexible insurance for anything you want to protect: car insurance, insurance for buildings and property, insurance for employees, liability insurance but also specific types of business such as insurance for builders, agricultural insurance or insurance for carriers.
For additional information you can consult the virtual assistant Amelie (24/7) on groupama.ro, you can write on relatii.clienti@groupama.ro, you can call AloGroupama 0374.110.110 (Monday – Friday, between 8:00 – 18:00) or contact Groupama’s network of resellers and partners.