3 Important Risks That Every Small To Medium Business Should Be Watching For
As providers Business Insurance Tasmania can be comfortable with, we speak with business owners every day who are cautiously optimistic about the months ahead.
There are some encouraging signs emerging, with confidence beginning to lift and conditions stabilising across many sectors.
That’s welcome news.
But in our experience, improving conditions don’t reduce risk — they often change the type of risks businesses face.
Growth, hiring, and increased activity can introduce new exposures if they’re not properly managed.
With that in mind, here are three important risks we regularly see — and how the right insurance can help when things don’t go to plan.
Succession Risk – When Ownership Suddenly Changes
This isn’t about selling your business — it’s about what happens if you’re no longer able to run it.
We’ve seen situations where a business loses an owner unexpectedly, leaving partners or family members trying to work out what happens next… often under pressure.
Without funding in place, this can lead to financial strain, disputes, or even forced sale of the business.
Buy/sell insurance is designed for exactly this scenario.
It provides funding to transfer ownership in line with an agreed plan, helping the business continue operating with minimal disruption and uncertainty.
Key Person Risk – The Hidden Exposure
Most businesses rely heavily on one or two key individuals.
It might be the owner, a senior employee, or someone who manages critical client relationships.
If that person is suddenly unavailable due to illness or injury, the impact can be immediate:
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- Loss of income
- Operational disruption
- Increased pressure on remaining staff
- Concern from clients
Key person insurance can help offset this risk by providing a financial buffer — allowing time to recruit, restructure, or stabilise operations without rushed decisions.
Cash Flow Risk – When an Event Hits the Bottom Line
This is often where businesses feel the greatest pressure.
Unexpected events such as fire, theft, or liability claims don’t just cause inconvenience — they can interrupt income while expenses continue.
That gap can quickly place strain on cash flow.
Depending on your cover, policies such as:
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- Property insurance
- Business interruption insurance
- Liability insurance
may help support your business during recovery, keeping things moving while the situation is resolved.
The Reality? Risk Doesn’t Disappear — It Evolves
Even when business conditions improve, the need for protection doesn’t go away.
In many cases, it becomes even more important to ensure your cover reflects how your business operates today, not how it looked a year ago.
For practical guidance on managing business risks in Australia, you can also refer to the Australian Government’s resource here.
At RSM Tasmania, we help business owners understand where they may be exposed — and what steps can be taken to protect what they’ve worked hard to build.
Because when something unexpected happens, it’s not the action you take that matters most…
It’s the plan that’s already in place.
Remember, this article is general in nature and doesn’t take into account your specific objectives, financial situation, or needs. For advice tailored to your circumstances, have a chat with us at RSM Tasmania Insurance Brokers Hobart.
Talk to Roger Hosie and stay ahead with RSM Tasmania’s insights.
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