The one risk most small business owners overlook

Most small business owners like to consider a what-if analysis for their business. They try to imagine all of the best and worst case possibilities and build a contingency plan in case the worst actually happens.

Considering that a certain risk could occur, allows planning for the mitigation of that risk. A
good risk example that most small business owners address adequately is security.

Strong door lock and deadbolts are installed. Monitored alarm systems watch all points of entry. Security cameras are installed to help catch and prosecute security threats.

But what if you can’t envision certain risks? How can you develop a contingency plan for something you don’t anticipate can happen?

The overlooked risk

The risk that is often overlooked by so many businesses is the damaging effects and consequences that power surges can have on your electrical equipment and business continuity.

Electrical surges can originate from sources outside of your business such as a nearby lightning strike to a tree. The lightning doesn’t even have to directly hit your electrical service to cause damage.

Lightning can “induce” a surge into your power line through the ground or through close proximity to overhead utility lines. The majority of surges actually originate from other equipment installed within a facility. One machine can affect other nearby machines and cause electrical damages.

Small businesses suffer avoidable equipment losses and business disruptions

Not knowing about the most overlooked small business risk, causes needless losses and business
disruptions. When you don’t know about the risk, you cannot develop an elimination or mitigation plan.
This may sound like an unwanted expense but how is it any different than not installing locks, deadbolts,
alarms and cameras on your business until after you have a major security incident?

spd type 1 2
Type-1 or 2 SPD

spd type 3
Type-3 SPD

The cost to install proper surge protection is relatively small compared to the protection afforded (just like with locks and cameras). By taking action now, you are acknowledging that you are aware of this new risk and have the wisdom to implement an electrical surge mitigation plan.

Providing surge protection devices (SPDs) now will help to reduce the chance for unexpected losses to your electrical equipment and untimely business disruptions after a surge event.

Although surge-damaged equipment can usually be replaced, what value is placed on the business
interruptions and the negative effects on your customers? As in most similar cases, after an unexpected
loss from electrical surge damages, business owners want to know everything about surge protection to
prevent a recurrence.

Luckily, by reading this you can benefit from the unfortunate loss experiences of others without necessarily having to go through it yourself. With this newfound information, you have the opportunity to help prevent similar disruptive events at your business.

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© 2018 The Hartford Steam Boiler Inspection and Insurance Company. All rights reserved. This article is for informational purposes only and does not modify or invalidate any of the provisions, exclusions, terms or conditions of the applicable policy and endorsements. For specific terms and conditions, please refer to the applicable coverage form.

John A. Weber

John Weber is principal electrical engineer for HSB. He has over 25 years’ experience in solving facilities and electrical engineering challenges.


  • I have read the above and understands the advice offered for a safe working equipment.

  • Hi I would like to know more about the powder Surge. Thanks Berniece

  • D-Johnson Insurance Agency Inc. appreciates HSB promoting a greater awareness to avoidance, which helps save many business owners the negative impact of power surges and “brown outs”! Thank you again Dale Johnson – agent

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