Implementing a risk management program can be overwhelming. You'll need to take steps to minimize the chance that things go wrong, also known as loss control. This can include purchasing insurance to reduce the impact of disasters or mishaps should something happen.
No one likes thinking about what could go wrong. Nevertheless, as a prudent business owner, you should assess and understand the risks your business faces. Get insights from the Aegis Insurance Markets Risk Management Team below.
What You Need to Know to Start Your Risk Management Program
#1: Identify Your Risks
Until you identify your risks, you can't make good decisions about managing them. One common, effective way to do this is with interviews of key personal by either an internal auditor or external insurance experts. This will give you real data to help inform your analysis of which potential risks could impact your financial or strategic goals.
You'll want to evaluate:
- Loss control measures
- Safety practices
- Compliance with laws and regulations
- Disaster preparedness and recovery
As part of this process, you should also look at the possibility and the potential cost of a risk happening.
#2: Implement Control Measures
Once you've identified your risks, implement a plan to manage them. This could include new safety measures or new insurance policies, among other strategies.
Some typical risk management techniques include:
- Contractual risk transfer - The use of contractual obligations (like indemnity agreements, waivers of recovery rights, etc.) to pass the risk along to others.
- Risk retention – The conscious retention of risk by planning to accept losses.
- Risk control - This minimizes losses through training, safety, and security measures.
- Risk avoidance - This approach prevents loss entirely by not engaging in activities associated with that risk.
- Insurance transfer - This transfers risk to your insurance company by purchasing a policy.
#3: Start at the Top
Risk management, particularly loss control, is most effective when it begins at the top of your organization. If your leadership team makes a point to emphasize safety, compliance, and ethical behavior, then your team is more likely to follow suit.
When implementing a risk management program, make sure you have complete buy-in from the top.
#4: Invest Proactively
Implementing a risk management program can cost money, but the costs of not paying attention to safety or liability can be far greater. By considering your risks and controlling for them ahead of time, you can avoid costly accidents, lawsuits, and other consequences.
Many small companies do not have the resources for a full-time risk manager. Even if this is the case for your business, it's still important to consider risk to effectively protect your business. That's why Aegis's risk management department is available to provide you the support you need to safeguard your business.
Our Risk Management Team is available to help you and your business be prepared for anything that comes your way. We work for you and as a part of your team to help you implement a plan to keep your team and your organization safe. Reach out to get a quote and get started.