What Is Risk Avoidance?
As a small business owner, you may be wondering about the risk avoidance definition. Risk avoidance means not doing certain actions to help protect your small business. It’s impossible to completely eliminate risks for your small business, but a well-defined risk avoidance strategy can help you get as close as possible. You can implement risk avoidance measures in many ways with your business through:
- Company policies
- Employee trainings
- Small business insurancecoverages
Risk Avoidance vs. Risk Reduction
Risk avoidance and risk reduction are both risk mitigation strategies. Risk avoidance means you’re trying to avoid compromising events as a way to eliminate liability exposures. Risk reduction is a way to help you control the damages to your business, like claims or losses. Learn more about risk avoidance versus risk reduction and how you can use both as part of your risk management plan.
Risk Avoidance Example
With risk avoidance, small business owners won’t run their company in a way that puts them at a specific risk. For example, you may realize sending employees to work at a customer’s home can open your business to more risk of bodily injury,vicarious liability or property damage claims. So, to reduce risk and avoid potential losses, you decide not to offer those kinds of services.
Risk Reduction Example
Risk reduction involves taking actions to mitigate your business’ risks. There are many types of risk reduction strategies. For example, you invest in more equipment to help you operate your small business. Without these tools, it’d be difficult to run your company. However, this equipment can get damaged or stolen, which can put your entire business at risk. Having commercial property insurancecan help you reduce your risks.Or if your equipment breaks down due to internal failure,equipment breakdown coverage can also reduce your risk.
Seek the Assistance of Risk Avoidance Professionals
Lawsuits can be time-consuming and expensive, no matter the size or profitability of your business. We can help you with mitigating risk and get you the coverage your business needs. Our Risk Engineeringteam has technical specialists who help businesses operate safely and efficiently, as well as reducing the potential impacts of a loss.
Get a small business insurance quotetoday and learn more about how we can help protect your business from different types of risk.
