The three main business risk categories are fire, crime and health and safety. Each of these categories comes with a myriad of associated risks.
Using the information below, you should be able to create your own action checklist based on the perceived threat and the likelihood of it ocurring in your business. Outline the individual risks under each of these categories and also highlight the possible actions to take to avoid such risks. Remember, controlling risks can be really beneficial to the long-term success of your business and may even help to reduce your insurance premiums over time.
Fire poses a great threat to both property and life and is a common cause of loss in the retail and professional sectors. Retail trades can suffer from fires starting as a result of arson, electrical problems and the careless disposal of cigarettes. Restaurants and cafes are particularly prone to fires starting from the build-up of fat and grease in venting and from fires started by deep fat frying.
Offices and surgeries, while experiencing fewer fires, do still suffer from fires started by arsonists and by electrical problems. While your insurance may pay for the replacement of damaged assets, such as your buildings or stock, there are still many aspects of a fire which your insurance may not pick up.
For example, shops and restaurants may miss out on passing trade and disappointed customers may, in time, find an alternative store.
In the case of offices, new clients would be unable to visit and new business opportunities could be missed. It is therefore important that you take precautions to guard your business against fire. The following is a guide to the types of fire risks.
Electrical: Offices can be prone to electrical faults and fires, as computers and other electrical machinery can overheat and catch fire. Retail premises, although generally containing less electrical equipment, can be prone to fires starting from faulty wiring.
Cooking with fat or grease: Fat and grease is often the cause of fires in kitchens, particularly when a build-up in filters or exhaust/ventilation systems occurs. Due to the use of fats and grease in some cooking processes, restaurants and cafes can be particularly susceptible unless adequate precautions are made. It is important that restaurants and cafes take precautions to minimise the risk of fire.
Heating: Shops and offices use portable heaters for heating purposes, but they are far more likely to cause fires than fixed heating systems and they can be an additional hazard to your customers or visitors who may get burnt, trip over them or knock them over.
Smoking: Careless, negligent smoking and the disposal of cigarette butts and ashes by customers are often the cause of fires in restaurants and cafes. Employees too, can cause fires with the disposal of cigarettes being a particular problem.
Combustible waste: The retail trade can generate considerable combustible waste material from packing and packaging. Even general waste can contain a significant amount of combustible material. Piles of waste or waste containers are often left outside buildings where they can be accessed by vandals and arsonists, so it is important to ensure that all potential sources of fire are eradicated.
Storage: Unsatisfactory storage arrangements can greatly assist the spread of fire. A small spark can quickly spread through a stock room which may contain cardboard boxes and other flammable materials. Therefore, storage arrangements for stock or packing materials should be strictly controlled.
Arson: Arson is one of the main causes of fires for most businesses including shops, restaurants, offices and surgeries. Easy access to a source of fuel can tempt passing arsonists so it is worth making sure you deny the arsonist access to fuel.
Fire fighting equipment: Fire fighting equipment can pose a problem if the equipment is unsuitable, poorly maintained or ineffectively used by untrained staff.
These factors can lead to severe burns to you or anyone attempting to tackle the fire so it is extremely important that the following are carried out:
If a fire occurs in your premises, it is most important that you and anyone else in the premises, such as customers and employees, leave as quickly as possible.
Remember that smoke rises, so crawl low where it will be easier to breathe and if possible, hold a damp cloth over your mouth to reduce smoke inhalation.
At your designated meeting place, make sure all people are safe and accounted for, then call the fire department on 000.
Crime is the source of some of the most disturbing losses:
- Theft can mean the loss of valuable stock or equipment.
- Assault or the threat of violent attack can leave people upset and distressed.
The threat posed by crime varies according to location and the type of stock or equipment that you use. For example, within the retail trade, certain types of stock are more attractive to thieves due to their value and portability. Stock items such as cigarettes and tobacco, liquor, electrical goods and clothing (especially sporting and leather clothes) are particularly attractive.
Offices are not immune to the threat of crime due to the attractiveness of computers, and in particular, the desirably of laptops which are both valuable and highly portable. Surgeries too can be targeted due to the presence of drugs and medicines.
Your insurance may not cover all of the costs associated with a criminal act, the absence of stock may mean missed sales opportunities, important customer information and work on computers may be lost and staff may be off work due to the stress of an assault. Here we look at the types of crimes which can pose a risk to your business.
Theft: Your first line of defence against theft is a good level of physical security to the perimeter of your premises – doors, windows and accessible rooflights all need to be secured. For shops, special precautions need to be taken for the protection of “target stock” such as liquor, cigarettes, clothing or electrical goods. Offices should pay special attention to valuable equipment (eg. computers, laptop computers in particular) whilst surgeries should also pay special attention to drugs and medicines.
Theft of money and valuables: Keeping cash on the premises overnight increases the probability of a break-in and can increase the damage caused as a thief tries to locate it. Due to the amount of money handled by the retail trade, shops are often targeted by thieves.
Shoplifting and pilferage: Shoplifting and pilferage are increasing and can be very damaging to any business and would not be covered by your insurance policy. This is a risk of which there are many remedies in the form of specialised security and heightened employee awareness.
Violence to staff: Employee security is of paramount importance to your business and regrettably statistics show that threats and violence to staff in shops and surgeries are on the increase.
Theft by staff: Sadly, few businesses can confidently claim to be immune to the possibility of theft by staff. Such theft can be extensive and damaging to your business.
Theft from vehicles: Attacks on vehicles involving the theft of stock can have serious consequences, incurring delays and additional expense in the replacement of stolen items.
Health And Safety
While your policy should cover injury to third parties and your workers compensation policy will cover injury to your employees, health and safety is still very important to your business.
Health and safety in the retail and restaurant trades are particularly important given the large numbers of customers who enter the premises and who may slip or trip and the large movement of stock requiring manual handling by staff.
In offices, the main risks can arise from repetitive strain disorders such as Repetitive Strain Injury (RSI) and other musculoskeletal related injuries. By promoting health and safety at work, you will be promoting a safe and more comfortable environment for your staff and customers and you will also be able to avoid losses to your business.
For instance, if a staff member is injured insurance will cover damages which need to be paid as compensation, but your business may also suffer through lost work days and the expense of having to recruit and then employ someone new.
Being aware of the health and safety risks will help minimise the possibility of such an event occurring. Here we will look at some of those possible risks.
Slips, trips and falls: The most common cause of injuries to both employees and customers at work is slipping or tripping. Resulting falls can be serious. They happen in all kinds of businesses, but the retail sector reports higher than average numbers due to the numbers of customers visiting the premises. Effective solutions are often simple and cheap.
Lifting and manual handling: Manual handling is transporting or supporting loads by hand or by bodily force. Many people hurt their backs, arms, hands or feet whilst moving stock or a heavy piece of machinery such as a photocopier. One bad lift can cause injury and cumulative damage can build up over time, even with lighter loads. Occupation health and safety regulations should be adhered to. Manual handling activities need to be assessed and measures introduced to reduce risk of injury.
Machinery: It is often thought that only manufacturing industries utilise machinery capable of inflicting injury, but many shops and offices have machinery such as wrapping and packing machines, guillotines and shredding machines. Accidents involving machinery and work equipment happen all the time, many serious, some fatal.
Electricity: Electricity can kill. Even non-fatal shocks can cause severe and permanent injury. Shocks from faulty equipment may lead to dangerous falls, such as from a ladder. Those using electricity may not be the only ones at risk. Poor electrical installations and faulty electrical appliances can lead to fires which can also result in death or injury to others.
Pressure systems such as boilers: Pressure cookers, boilers, steam heating systems and air compressors are common examples of equipment or systems containing a fluid or gas under pressure. They can cause death or injury and serious damage to property, if the contents are released unintentionally.
Fire safety: Swift evacuation of your staff, customers or visitors is vital in the event of a fire. Whilst property can be replaced, human life cannot so it is extremely important that you take suitable action and make appropriate plans.
Noise: High levels of noise at work can cause hearing loss. If people have to shout to hear each other at normal speaking distance then there is likely to be a danger to hearing.
Maintenance and building work: It’s easy to overlook these activities because they happen only occasionally and it’s often a contractor or service agency doing the work outside of normal routines. If you are the person responsible for your business, you are also responsible for contractors, service engineers etc. who do the work for you.
Computer set-up: It has long been known that employees at computer workstations can sustain injuries due to the repetitive nature of their work. Ensuring that the workstation and worker are arranged ergonomically will assist in minimising the risk of musculoskeletal-related injuries. There are many simple and effective measures that can be implemented to promote a healthy posture.
Once you have assessed and identified physical risks associated with your business, you should assess the external threats which, in effect, are beyond your control.
External threats could be factors such as a change in interest rates, this could have an impact on any loans you have taken out or if you have taken out a mortgage to purchase your business premises.
Alternatively, the government may pass new legislation which could directly affect your industry or trade, or even your customers or suppliers. It is therefore a good idea to consider what these external risks could be.
To do this you should use the SWOT method (Strengths, Weaknesses, Opportunities, Threats). By identifying external opportunities and threats, as well as classifying internal ones, you will be able to prepare, and in some cases, use these risks to your advantage.
By knowing the strengths, weakness and threats of a particular risk, you will be able to also focus on the opportunities such a threat may provide. This could give you a competitive advantage over other businesses who have not prepared.
You might even be able to identify how you could convert a potential risk into a strength or opportunity and perhaps an income-generator!