The right insurance partner can assist business owners with the design and implementation of a thorough risk-management strategy that will ensure long-term sustainability and success.
In its simplest form, business insurance risk management can be broken down into four steps:
From fires and floods to armed robberies and shrinkage; from legal compliance to accidents and liabilities, each business has its own specific risks. For this reason, a professional risk analysis by a risk expert - called risk assessors in the insurance industry - is advised. Insurance risk assessors are able to harness extensive global and local experience and expertise to assist business owners in identifying and uncovering both common and unique risks associated with their businesses; and it would, hence, prove invaluable to make use of the services that they provide.
Because of the sheer volume of risks that need to be addressed in various business environments, the risks identified must be evaluated in terms of their likelihood and consequences, and then prioritised. The prioritisation process ensures that the risks with the greatest potential loss and the greatest probability of occurring are handled first and, as such, that resources are allocated efficiently.
Once the risks have been prioritised, an effective response to each must be planned and implemented. There are, essentially, four responses to a risk, namely:
A combination of these options is often required and, again, assessing the most appropriate response to each risk can be done by (a) investigating and successfully implementing the most effective way/s to mitigate common risks in specific business environments, and (b) uncovering the most cost-effective and efficient means of transferring the risks that are potentially catastrophic, or cannot be avoided or mitigated.
To have real value, risk management must be a dynamic, ongoing and essential part of the management process. This is because (a) new risks constantly emerge, (b) existing risks may become less probable or their impact might be reduced due to technological developments, and (c) the probability of certain risks may increase due to market and economic conditions.
Business owners should partner with a good insurer that can keep their business informed regarding developments that may pose a risk. Your insurer must also continuously innovate new risk-management strategies and insurance solutions for dealing with both current and emerging risks.
The real value of insurance in risk management goes beyond simply having an insurance policy. Profiting from this value entails choosing an insurance company that will build a relationship with your business and will partner with you throughout the entire risk management process. Such a partnership creates true peace of mind, which is what effective risk management is all about.