The Fine Art of Managing Your Corporate Risks

Your insurance program should be as individual and unique as your business.

The process of defining a program that will best manage your corporate risks is called risk management. It should be included as part of your overall strategic plan.

The following will help you develop a program to meet your unique needs:

Identify and Prioritize: Risks are inherent in every business. A retail store has a high potential for losses due to theft, a manufacturer’s equipment can malfunction and a contractor should be concerned about accidents. Consider these exposures, then prioritize. Which exposure is likely to result in the greatest financial impact?

Deal With Each Risk Individually: Determine the best way to deal with each exposure. Insurance is only one way of transferring risk. Avoidance is another. For example, contractors may ‘avoid’ high-risk jobs. A third is reduction (sprinklers reduce fire damage.) When no alternative is available, insurance protects your assets so you can return to business as usual.

Implement: Follow through and protect your business against each exposure.

Monitor: Continuous improvement is an essential part of your plan. Regularly evaluate its effectiveness and tweak it as needed; for example, if a new technology becomes available.

Risk management is a vital part of owning a business, and knowing your assets are protected will give you peace of mind.