3 common risks every retailer should know about

Retail risks

Congrats! You took a passion and turned it into your very own business. Running your own business requires hard work and vision. But while you’re focused on managing your inventory and interacting with customers, there are risks that may be out of your line-of-sight.

Certain retail risks can cause your business to crumble like stale cake and can impact your bottom line. Having proper procedures in place when something bad happens is helpful, but noticing these risks before they occur is a strong first step towards protecting your business. Don’t worry; we’re here to help you keep your business from crumbling. Here are some common retail risks that you need to be aware of, and how insurance can help you combat them.

These retail risks could cause your business to crumble

1. Theft

Sure, ambitious Ocean’s Eleven-style heists may be rare, but theft is still a common issue for retailers in Canada. In fact, Canada’s retail industry loses roughly $4 billion a year to theft every year.  Here are some things you can do to stop thieves in their tracks:

  • Review your store’s layout to make sure there’s enough lighting; you can’t catch shoplifters if you can’t see them!
  • Install a welcome bell at your door to help you keep track of who’s entering your store; it’s also just a fun sound, in general!
  • Set up security cameras to help you capture blockbuster footage of every nook and cranny in your store. Use this free infographic to set up the right video surveillance system.
  • Make your presence known to ward off suspicious shoppers; a friendly greeting to your customers can guilt-trip those looking for a shoplifting thrill.
  • Keep expensive items near the checkout counter; certain items in your store may be prime targets for amateur Robin Hoods.
  • Use electronic tags on all your merchandise to detect non-purchased items that exit your front door; nothing stops a quiet getaway quite like an obnoxious alarm.

If you have employees, make sure you’re working with all of them, from management to front-line workers, to develop a culture of loss prevention. This step is crucial, as 33% of theft-related incidents in retail are inside jobs involving internal employees. Empower your employees by providing them with clear guidelines on what they’re accountable for. Your employees should want your business to succeed as much as you do!

2. Cyber Crime

You may assume that cyber attacks only happen in TV shows like Mr. Robot. But everyone knows what happens when you assume things. The truth is that 43% of spear phishing emails and 54% of spam emails target small businesses.

Spear phishing is when hackers send you emails that appear to be from a trusted source, like a colleague or a family member. Spam is unsolicited junk email, usually advertising something maliciously (SPAM is also a delicious brand of canned cooked meat).  Small companies tend to be easier targets because they often lack the resources and protective barriers that larger ones use to fend off cyber attacks. Here are some ways to defend yourself from the Mr. Robots of the world:

  • Make your passwords unique and difficult to guess.
  • Update your passwords on a regular basis.
  • Don’t click things from people you don’t know; if you receive a sketchy email from someone you do know, give them a call to confirm that they sent something to you.
  • Install anti-virus software on your computers, which can protect you from email attacks and sketchy attachments.
  • Update your software often; many software updates include security enhancements and bug fixes that could help defend you from cyber attacks.
  • Actually read the terms and conditions when installing or downloading things like software. Resist the temptation to quickly skim over this page, as it will include details on what kind of access you’re giving to various parties.
  • Back up your data. If your business does become a target, it’s important to always have a backup of all your files secured. You can use cloud sharing or an external hard drive to do this—better yet, why not both?

Implementing the tips above can help you and your employees shield your business from unwanted cyber threats. Having cyber event expense insurance can also help you cover your business in the event of a breach.

Although business owners may have misconceptions surrounding cyber insurance, a cyber attack can severely impact your finances, along with your reputation with customers, if your business is not protected properly. Having the proper safeguards against cyber threats in place will have you feeling like this kid.

3. Customer Injuries

When a customer gets a booboo, your business could get a booboo as well. Slips, trips, and falls are a leading cause of injury in Canada according to Statistics Canada, and lawsuits stemming from these kinds of bodily injury events are common amongst small business owners – so you need to be prepared.

In situations of third party bodily injury, you would turn to your commercial general liability (CGL) insurance for protection, but there are ways for you to proactively protect yourself from these accidents. The following infographic can help you watch for booboos that could impact your business:

Slips, trips and falls infographic

Protect your bottom line

Theft, cyber crime, and customer injuries are all retail risks that can hit your business hard. Knowing how to identify and prevent these retail risks can help you avoid costly losses and a crumbling business. So, remember to keep your eagle eyes open for risks while you’re busy living the dream.

Ready to protect your business from retail risks?

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This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information. Terms, conditions and exclusions apply to coverage. See policy for details.