That is to say, if business X did not do risk management because it is small and unsophisticated, it is okay to let business X wind down, whereas it is not okay to let a human go hungry because they are unsophisticated. Humans have rights, Businesses do not. I'm as conservative as they come (look at my post history), and I am flabbergasted by people from both sides of the aisle who honestly, truly believe businesses have a right to exist, including welfare for when they are unable to.
When it comes to human life, given by God, we are obligated to spend almost any amount that we can in order to preserve that life. When it comes to business existence, we are not. By all means, welfare programs should immediately be expanded to help the individuals affected (including the business owner) to not go hungry, or be without medical care. By no means should the business continue to operate via welfare magic.
Hopefully, for the business owner, the individual welfare availability will give him/her some time to get back on their feet and potentially start the business again with new capital if needed. But the source of that capital is not a concern of the government. That's for the private market.
When people buy TVs, cars, fridges or shop for a laser eye surgery procedure, they seek out credible third party assessors, in the form of Wikipedia articles, Consumer Report magazines, end user ratings, etc to inform their decisions.
The collective intelligence of the consumer market will also increase as more people participate as price and quality conscious consumers.
Otherwise there is no reason for depositors to do due diligence, and we get a less effectively managed economy as a result.
Consumers do much, if not most, of the management of industry, but that's only if consumers are fully exposed to the costs incurred by their choices. It's because consumers bear the costs in cosmetic procedures that such procedures are getting cheaper while healthcare gets more expensive:
https://www.ncpathinktank.org/pdfs/st349.pdf