Business risk management

A proactive approach to safeguarding a company’s assets and reputation.


What is business risk management?

Business risk management involves identifying, assessing and mitigating risks affecting a company’s operations, finances and overall success. It’s an evolving process as a business grows and faces new challenges.

How do businesses manage risks?

Putting together a risk management plan is essential for your small business’s long-term success. Risk management planning also involves implementing preventative measures and contingency plans to minimize losses.

Here are the basic four steps for business risk management planning:

  • Identification. The first step involves recognizing potential risks, which can be internal (like financial mismanagement) or external (like market volatility).
  • Assessment. After identifying risks, businesses assess their potential impact and probability. This helps prioritize which risks to address.
  • Mitigation. Next, businesses develop strategies to reduce or eliminate these risks. This might involve diversifying investments, purchasing insurance or implementing safety protocols.
  • Monitoring. Risk management is an ongoing process. Businesses continually monitor and reassess their strategies as circumstances change.

Primary categories of business risks

How do you identify risk? The major categories of business risks include:

Think about your daily business operations and consider the types of risks your business may face. How would risks arise during normal business activity? Once these and other risks are identified, the business has a better idea of the proper insurance policies that cover potential losses.

Insurance for managing business risks

Small business insurance is one of the best ways to protect your income from things that could go wrong.

Here are a few common coverages business owners have to reduce risks.

  • General Liability insurance offers protection against various accidents and potential lawsuits that can arise in the daily operations of a business, such as bodily injuries to non-employees, damage to another person’s property, reputational harm and associated legal costs.
  • Professional Liability insurance helps protect you when you are accused of not having done your job correctly.
  • Commercial Property insurance covers a business’s physical assets, such as inventory and buildings, against damages like fire, wind and vandalism.
  • Workers’ Compensation can help cover expenses for medical care, lost wages and other costs after a workplace injury.

Each business is unique, so talking to an insurance expert helps them get the best coverage for their needs.

Let NEXT be there for your business

At NEXT, we’re 100% dedicated to small businesses. With 24/7 access to your plans and policies, you’ll always be prepared for whatever comes your way. All you have to do is apply online and follow the prompts to access your custom instant quote in 10 minutes.

Start a free instant quote with NEXT.

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Let’s find the coverage you need for your business
Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.
General Liability insurance
General Liability
Protect yourself from accidents that cause physical injury or damaged property.
Professional Liability or Error and Omissions Insurance
Professional Liability/E&O
Shield yourself from lawsuits that claim your work errors caused financial losses.
Workers' Compensation Insurance
Workers’ Compensation
Cover medical bills and lost wages if your employees have an accident at work.
Commercial Auto Insurance
Commercial Auto
Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.
Tools & Equipment Insurance
Tools & Equipment
Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.
Commercial Property Insurance
Commercial Property
Keep your building, inventory and equipment protected from fire or water damage.
Business Owner’s Policy Insurance
Business Owner’s Policy
Combine general liability and commercial property into one policy to protect your business.
* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.