Risk Assessment: Why It Is Important For A Business Like Yours

Risk Assessment: Why It Is Important For A Business Like YoursSource: Morguefile

There is a new approach to running a business today. Companies are trying to be as ethical and approachable as possible. With the increased level of regulation and the improved communication methods of customers, it is important that all businesses adopt policies that address risks. You might think that risk assessment is only for large construction and engineering firms, but you are wrong. Every small and medium sized business should pay attention to risk assessment and protect their reputation, customer, brands, and assets. Find out more about the risks you need to look out for below.

1. Fraud Risk

It is important that companies assess their employees for fraud risk. Vetting your workers is a cheap way of making sure that they do not pose a risk on your company’s reputation. The details provided from the management are confidential and you will only get a notification if there is a risk factor, such as extreme debt or personal connections to criminals. While fraud can happen to any company, those that complete a risk assessment are more prepared. Get network firewalls installed and make sure that you have a confidential waste policy.

2. Phishing Risk

Protecting your intellectual property and customers’ information is important. You must have heard about companies’ shares dropping significantly after their databases and websites got hacked. At the same time, it is your responsibility to educate your employees about the risk of sharing and disclosing information. Always look for the source of emails and verify the identity of people requesting information. The most common form of phishing risk for companies is people pretending to call from IRA and requesting access to files online or offline. Employ an online security expert to eliminate online risk.

3. Security Risk

Security risks come in different forms. You can have a manufacturing plant that receives government contracts and needs to be thoroughly assessed. It is likely that you will be required to employ a political risk consulting company to carry out the assessment. In other cases, you might work for the military or have clients in countries that represent high risk. Security risk assessments usually cover physical, intellectual, and reputational assets.

4. Liability Risks

If you work in an industry that involves safety regulations, training, and equipment, you must be covered by liability insurance and have adequate guidelines to reduce the risk of causing injury to members of the public or employees. Liability insurance companies have a minimum requirement for risk assessment and procedures they need to provide you with an insurance. If you fail to put guidelines and policies in place to protect the public and your workforce from harm. This involves pollution prevention, warning signs, health and safety training, regulations, and compliance targets.

When running a small or medium sized business, the last thing you want to do is have to pay hefty fines and compensation for not complying with risk assessment regulations. It is, however, not only your budget that will suffer if you don’t address risks. Your company will suffer from reputational damage that is extremely hard to reverse, and can cause financial loss.