Running a small business is exciting and rewarding, but it also comes with risks. From unexpected market shifts to cybersecurity threats, business owners have to navigate challenges that could impact their success. While no one can predict the future, having a plan in place makes all the difference.

“Small business owners put their heart and soul into their work,” says Angela Donaldson with the Kevin Hauglie Agency. “Taking the time to understand potential risks is one of the most valuable steps they can take to protect their business and ensure long-term success.”

Step 1: Understanding business risks

No matter the industry, every business faces risks that could lead to financial loss, operational disruptions, or damage to its reputation.

Some of the most common include:

• Legal and liability risks: Customer disputes, compliance issues, or lawsuits.
• Market risks: Economic downturns, competition, and changing customer demand.
• Property risks: Damage from fire, theft, or vandalism.
• Industry-specific risks: Regulatory changes or safety hazards.
• Cybersecurity threats: Hacking, data breaches, and online scams.
• Regulatory risks: New laws, tax changes, and compliance updates.

Contact the team at Kevin Hauglie Agency to ensure your business is properly protected against whatever life throws your way.

Cybersecurity, in particular, is becoming a growing concern. Business owners should be aware of key laws that may affect them.

• Graham-Leach-Bliley Act: Protects consumer financial data.
• HIPAA: Covers health data security.
• FTC Act: Addresses misleading cybersecurity practices.
• Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA) 2022: Requires reporting of significant cyber incidents.
• Washington’s Data Breach Notification Law: Requires timely notification of affected individuals.

Insider Tip: Conducting a simple SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) can help businesses recognize vulnerabilities and plan accordingly.

Schedule a policy review online today!

Step 2: Assessing the impact of risks

Once you know what risks your business faces, the next step is understanding their potential impact:

• Financial: Could it lead to lost revenue, fines, or legal trouble?
• Operational: Would it disrupt daily business operations?
• Reputation: Could it hurt customer trust or your brand image?

“A well-thought-out risk management plan can help businesses not only survive but thrive, even in uncertain times,” Donaldson says.

Step 3: 4 ways to reduce business risks

1. Get the right insurance: Your policy should cover essential risks like liability, property damage, and cyber threats.
2. Invest in cyber liability insurance: This coverage helps with costs related to data breaches, ransomware attacks, crisis management, legal fees, and regulatory fines.
3. Create a backup plan: Know how you will respond to worst-case scenarios.
4. Train your team: Employees should be aware of risk management strategies and follow security protocols.

Step 5: Long term planning using the S.E.E. Method

Managing risks isn’t a one-time task—it’s an ongoing process. Donaldson recommends using the S.E.E. method to stay prepared:

• Strategize: Identify key risks and create a plan.
• Execute: Put the plan into action with training and updates.
• Evaluate: Regularly review and improve your approach.

The agents at the Kevin Hauglie Agency can offer assistance with your business’s needs analysis and demonstrate how a comprehensive insurance review can help achieve your 2025 goals and prevent unnecessary stress.

“Together, we can create a safer, stronger business community—one that’s built on preparation, protection and peace of mind,” Donaldson says. “A little preparation today can save you time, money and stress in the future.”

For more information or to schedule a policy review, contact the Kevin Hauglie Agency at 425-222-5881 or visit agents.farmers.com.

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