By Daniel Hunter
Nearly three quarters of small business owners fear professional mistakes, but are unprepared to deal with a compensation claim if they fail to meet the standards required of them, according to AXA Business Insurance reveal.
Seventy-four per cent of small business owners admit they worry about making mistakes on client projects, almost half (47%) worry about giving bad advice and a quarter (24%) worry that a client will claim for compensation related to this.
Yet many are unprepared to deal with a serious confrontation about the quality of their service or advice, leaving their businesses vulnerable should a claim arise.
Almost one in five (18%) admitted that they don’t fully understand the law related to their specific area of work, while research published by Datamonitor in 2014 shows almost a quarter (22%) of businesses that give professional advice don’t have professional indemnity cover, meaning they’re not protected against legal fees or compensation claims if a client alleges they’ve made a mistake or given bad advice.
Darrell Sansom, Managing Director at AXA Business Insurance suggested it’s normal to suffer an occasional wobble but it’s important that business owners plan effectively to minimise risk, and make sure they are protected should the worst occur.
He said: “Most business owners embark on their entrepreneurial journey with optimism and excitement, but we know from the conversations we have with them that the learning curve is steep and many can find it’s lonely at the top. Having responsibility for every choice and decision is empowering of course, but constantly pushing yourself out of your comfort zone can also be tiring and sometimes it’s natural to question your own judgement.
“When you do have a wobble, it’s important to remember that most of the time your fears are normal and understanding the risks you face actually make your business stronger. But it’s also important to admit and learn from mistakes, and to understand the root cause of your worries so you can check whether they’re pointing to gaps you need to fix.
“Confidence is what gives us the courage to push boundaries and deliver innovation, so it’s important to sustain it for business success. Simple steps like surrounding yourself with good people, planning effectively, educating yourself about your rights and responsibilities and checking you have the right protection in place will boost your business confidence and ensure you’re best placed to succeed.”
Here are AXA Business Insurance’s top tips to keep your business confidence high:
Take time to celebrate something every day — from a minor milestone to a major win, celebrating success helps you understand and build on what you are best at.
Connect with others
Whether you find yourself a business mentor or simply talk to people in a similar situation, connecting with others helps you put fears into perspective and creates a supportive environment to resolve issues and share learning.
If you know why you’re doing something, you’re more likely to be doing it right. Taking time to plan and prepare gives you control of any given situation and a better understanding of what you need to do and how you will achieve it.
Ensure all work is signed off and that you have a paper or digital trail to prove it. Work together with your clients to build up joint responsibility for sense checking ideas and looking out for mistakes so they are less likely to occur.
And finally, don’t let a slip up destroy all that you’ve built. Professional indemnity insurance protects you if a client claims you’ve made a mistake in your work so it may be of benefit to you. It protects you from legal defense fees and compensation claims and it’s important for businesses that give advice, offer a professional service or handle client data or intellectual property.