New Jersey commercial Insurance: Risk Assessments

While every NJ business should have an adequate level of New Jersey commercial insurance for damages and losses, each one should also conduct its own risk assessment or “Business Impact Analysis” (BIA). This is not a one-time step but needs to be monitored, to receive feedback, and to be regularly updated if necessary.

According to FEMA the BIA should involve hazard identification, recognizing the assets at risk from these hazards (vulnerability assessment), and estimating the potential impacts (impact analysis). Hazards include internal items such as workplace design, machinery and equipment, and hazardous chemicals; natural ones such as earthquake, flood, wildfire and hurricane, and biological problems such as pandemics; and man-made dangers such as terrorism, violence, robbery, explosions, cyber-attacks and strikes. Assets at risk include people, property, business operations, information and reputation. Impacts may include fatalities, injuries, property damage, and interruption to business, loss of clients, financial losses, fines and lawsuits. 

Conducting assessments of this type help businesses to more clearly pinpoint areas of risk and implement strategies for dealing with them. This may include disaster planning, use of safety equipment, property repairs and increased insurance coverage. In addition, reducing the rate of impacts may save the business time and money and reduce its number of New Jersey commercial insurance claims. Tools for conducting risk assessment or BIA can be found at FEMA and the Insurance Institute for Business and Home Safety. 

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