How can a comprehensive risk assessment benefit a company?
Undertaking a comprehensive risk management and assessment program can help a company in many ways. Such a program will help you to focus on better overall management of your company and help support a more effective strategic business plan.
Timely reaction to an unplanned event will lessen the impact of that event on the bottom line. By taking the time to identify and manage risks posed to you, you may find that you are in a much better position to succeed.
How can a business develop a comprehensive risk assessment plan?
Committing to a plan is the obvious and most important first step. That plan should be part of an ongoing and proactive risk management process. If your organization does not employ a full-time risk manager, you should appoint a point person to oversee the program. There are also many outside sources, such as consultants, who can provide preliminary and/or periodic audits of your program. Many times, your own insurance broker can be of great help in this area.
Careful evaluation of all aspects of your company’s operations is required, including inspection of the physical plant, vehicle and/or equipment fleet, review of all agreements (employment related, purchase orders, leases, third-party contracts, etc.), Web site content, employee manuals and handbooks, and internal procedure manuals.
Another important area that should not be overlooked is the impact, if any, of a disruption of business for a major supplier or customer.
Note that there are many tools available, such as risk survey checklists, which may be found online. And while these are a great starting point in the process, they may also include questions or sections unrelated to your particular organization. More important, they may not include questions related to areas unique to your industry or individual company.
Once you formulate a plan, you must maintain regular follow up, review and documentation in order for the plan to be effective. It must also be adaptable to change, as you may find that the risks to your organization are constantly evolving with the times.
Who should be involved in the process?
Top management must direct and commit to the process.
Additionally, members from each key department should be involved. The people on the front line are often better suited than management to help in identifying some of the potential risks posed to an organization. These employees will also be directly involved in the implementation and modification of any plan put in place.
Along with the staff, it is also critical to have a knowledgeable consultant assist you in the process and provide needed insight and resources.
John P. Azpell is an account executive with ECBM Insurance Brokers and Consultants. Reach him at (610) 668-7100 x1329 or [email protected].