Death and taxes aside, nothing in life is certain. As such, many of us like to take some precautions. We wear seatbelts to lessen injuries in case there’s an accident. We put money aside in case the air conditioner needs to be fixed during a two-week period of triple-digit temperatures. We buy health insurance in case our appendix bursts on a trip to Maui. In the end, all of these precautionary measures are in place to spare us less expense and distress in case a personal crisis occurs. Life is unpredictable, and so is business. As a small business owner, you should be taking precautions to protect your company’s future.

Picture This  

You’re the owner of an eclectic and popular used bookstore in a 100-year-old building downtown. You’ve got two stories of floor-to-ceiling books. One morning, upon arriving to work, you notice a strange gushing sound. You go downstairs and find two feet of water — with more flowing in. Apparently your neighbor’s pipe burst, and everyone on the block now has a flooded basement. The bottom two shelves of books, as well as the carpet and chairs, are ruined.

Sadly, when you took out your business owner’s policy, you did not tick the “flood” box. All the costs of clean-up and inventory recovery are too much. The “Closed” sign is now permanently turned.

Our Lawsuit Culture

But, sometimes, a crisis is more personal than a pipe bursting. Like it or not, we live in a lawsuit-happy culture, where many people continually try to blame others for everything that goes wrong. There’s a reason your hair dryer comes with a tag that says “Do not use while sleeping”; someone tried it, sued the company, and won. And let’s not even bring the infamous McDonald’s hot coffee incident into the discussion. Businesses can be sued for any number of things and by any number of people — employees and clients alike.

For example, if an associate lawyer is headed to a deposition and is injured in a car accident, that lawyer could sue his own law firm because the accident happened in the course and scope of his job. A business can face external lawsuits, as well. If a place of business doesn’t salt its sidewalk in wintry weather, and a customer slips and gets hurt, our culture encourages him to sue.

Being insufficiently prepared for potential lawsuits can be fatal for your business. If you don’t have enough insurance, you might be held liable and then forced to sell off assets in order to pay a settlement. Additionally, if you’re spending a lot of time wrapped up in the headaches of litigation, you just won’t have as much time or energy to devote to your business. Depending on the nature of your work, you could miss deadlines, see a drop in sales, and even lose clients.

Proactive Protection

Now, for the good news: It turns out tragedy is avoidable a lot of the time. The trick is to stay ahead of problems so you already have solutions in place when they arise. It can be hard work, but as an entrepreneur, you’re used to that, right? The most important thing is to be able to handle a crisis without it putting a dent in the day-to-day running of your business.

To protect your business, there are three key professionals you need to consult. An attorney will help you organize your business structure and ensure that you meet ethical standards. A marketing company will help you hit your potential customer bases. Finally, an insurance agent will make sure you have the appropriate amount of coverage.

The importance of insurance cannot be underplayed. Apart from a good business owner’s policy, to protect your business to the max, you’ll also need business interruption, professional liability, and life and medical insurance. These will proactively cover all your bases.

Protect Yourself, Protect Your Clients

Businesses that take measures to protect themselves are also protecting their clientele. Customer well-being and safety should be one of your priorities. And don’t think people won’t notice; a business capable of operating as usual in the midst of a visible crisis — such as a basement flooding or lawsuit — will look impressive and instill confidence in its customer base. At the end of the day, being prepared for the “in case” scenarios means that you can spend less time bogged down in crisis and more time on the people who matter most: the clients who keep your doors open.