The key to business growth: Risk Management

Knowing how to manage risk is a vital part of growing your business. There are three areas where risk is most prominent for small to medium enterprises (also known as SMEs) – fraud, human capital and cyber. We take a closer look at these issues, including how they could be putting your business at risk and what you can do to manage it.

Fraud

Fraud can occur both purposefully and unintentionally. Human error is a prominent security risk when it comes to data breaches. It is necessary to put security systems in place to prevent fraud in your workplace. A few handy procedures you can use are:

Tidy desks: encourage your employees to keep their desks tidy, and lock confidential documents in drawers.
Printer stations: have a policy that all printed documents need to be picked up off the printer immediately, rather than sitting there for anyone walking past to find.
Secure devices: encourage employees not to use their personal devices for work, as the security systems on these devices will not be up to the standard of your corporate security measures.
Shredding documents: ensure that all documents are shredded immediately after their use has expired. Even if the document is to be recycled, it must be shredded first. If using a third party company to dispose of documents of a sensitive nature, be sure to inspect their own security measures.
Finances: Ensure dual signatories or authorisation is required for significant i.e. >$5,000 cash, cheque or EFT payments.

Despite conducting these security practices, fraud can sometimes be entirely out of your hands if a third party is involved, or the act is intentional. The only way to fully manage the risk of fraud for your company is through insurance. Speak to an insurance broker to find out the best form of insurance against fraud for your business.

Human capital risk

It is no secret that the way you manage your employees will directly affect the work that they produce, and their relationship with the company as a whole. Bad hiring decisions, poor treatment of workers or unfair working conditions can lead to:

  • Inadequate customer service.
  • Loss of revenue.
  • Workplace politics.
  • Slow work progress.
  • A bad brand reputation.

Mediate human capital risk by encouraging a healthy workplace environment. A few ways you can do this are:

  • Employee team building days.
  • Company outings.
  • Workplace encouragement.
  • Cross training.
  • Encouraging work-life balance.

Cyber risk

Almost all SMEs have an online presence, which automatically puts them at risk of suffering some form of cyber attack or breach. Ask yourself this question and determine how prepared you are in the event of Cyber attack or breach affecting your business; ‘What would your business look like without telephones, computers and internet for one week?’

Having good security software installed will get you a long way but you have to also account for human error when it comes to your employees, especially when sending or receiving emails. Make sure all of your employees are educated in being able to recognise a false or impersonating email and that they know not to open anything that looks suspicious.

Despite this, cyber criminals are continually finding new ways to hack systems and break through firewalls put up by antivirus software. It is important to maintain constant vigilance when it comes to the risk of cyber attack. In saying that, many businesses don’t have the time to mitigate this risk on a daily basis. This is where an insurance broker is invaluable. Having Cyber Protection Insurance as organised through a broker, will ensure that your policies are updated as your business grows, and as the cyber world expands and changes.

These three prominent areas of risk for SMEs can be particularly tricky to navigate as they all deal with human error. For advice on how to manage these risks in your business, contact Western Insurance Brokers, so that they can take care of managing risk for your business so that you can focus on growth.

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