Business risk – protecting yourself


Business risk should be a fundamental consideration for any tradesman or small business  owner, and properly protecting yourself can be the difference between swimming in cash or being in the sh*tter.

Most small business owners don’t spend as much time as they should understanding risk and how it can affect their business, let alone implementing strategies to manage, avoid or transfer risk.

Instead of putting your head in the sand and hoping for the best we recommend being alert, aware and implementing some simple systems to protect you and your business. Here’s one to start you off:

What is a business risk management framework?


A good place to start is to identify potential risks your business faces, this will help you rank which are most important to cover. Once identified, you can begin to protect against them.

Some questions to ask yourself:


  • Is your security adequate? – lock your tools up!
  • What is your plan B incase something isn’t covered?
  • Are your personal and commercial risks insured?
  • Are you training employees in ensuring their own safety?

Here’s a nice simple example:

Risk table showing how to cover small business risk

How do I do this for my business?


1) Create a table for each of the four areas of risk listed below and identify risks that are specific to your business

2) Use your gut feel to decide how often an event might happen

3) Cost of event: you can use real numbers if you want, but it’s probably easiest to give it a rank out of 1

4) Multiply step 2 and step 4. Now you have a number indicating the severity of the risks you face

5) Rank all the risks on that final score.

6) Start reducing and transferring that risk.

Planning for risk goes far beyond insurance; you should be incorporating Health & Safety, pro-active accounting practices and common sense also.

Some examples to tackle common business risks:


  • Implementing policies that value employee safety over speed
  • Installing security systems to guard property
  • Avoiding deals with customers with bad credit history

Over the coming weeks we’ll cover the main areas of business risk:


  • Financial Business Risk
  • Liability Business Risk
  • Personal and Family Business Risk
  • Property and Assets Business Risk

Stay tuned!

Cactus Insurance believes the information in this publication is correct, and it has reasonable grounds for any opinion or recommendation found within this publication on the date of this publication. However, no liability is accepted for any loss or damage incurred by any person as a result of any error in any information, opinion or recommendation in this publication.

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The information contained in this publication is general in nature. It may not be relevant to individual circumstances. Before making any investment, insurance or other financial decisions, you should consult a professional financial adviser.

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