Assessing Small Business Personnel Loss Exposures

In the past we've discussed property and liability loss exposures and ways to forecast and prevent them. In this post I would like to discuss a loss exposure not often identified by the small business owner as an insurance related item, personnel loss. It's easier to just dilute this exposure down to 3 different categories - individual employees; owners, officers and managers; groups of employees. As you have probably realized by now, we're addressing the specific issues and problems that can arise when the loss of any of the aforementioned becomes a reality for a business. The first category, individual employees, relates to someone in the company that performs a unique role within the organization that is not easily replaced. This could be someone such as an engineer with specialized skills that relate specifically to your business. The next category, owners, officers and managers, obviously relates to those in a management position involved with the day to day task of running the business. The last category, groups of individuals, would be associated with companies that have manufacturing or construction related tasks requiring several workers. The risk management objective would be to forecast what the loss exposures would be for these groups, find ways to minimize them, and then figure out what the company would do in the event a loss occurs to any of them. In my next post I will discuss some of the risk management solutions a small business could implement to minimize and recover from a personnel related loss to their company.