Identify potential exposure
Like anything in business, a true commitment to risk management starts with the company’s leadership. Set aside time for your organization’s key players to sit and outline the different risks you might face, such as financial, property and casualty, and legal.
There are a number of assessments you can do — such as risk mapping or enterprise risk management — depending on the amount of detail and commitment you want your program to include. Regardless of what direction you are going, you should include your insurance broker in the conversation. Odds are his or her experience, benchmarking data and outside eye will lead to valuable questions. A good broker has dedicated risk management and claims services and will go through a checklist that will bring your risks to light.
Once your risks have been identified, your broker can help you develop a strategy to quantify your risks and determine whether you should mitigate or transfer the risk.
“There are a number of different tools that can be used for companies to better understand their exposures, and once they understand exposures, they can then determine what the impact of those exposures would be to their company and their bottom line,” says Tom Breiner, managing director and head of the Indianapolis office, Marsh Inc. “An effective assessment process will also help them determine the types of insurance they should carry and the amounts of insurance they should purchase.”
The process is fairly systematic, but it’s also continuous. A true risk management plan involves constant monitoring. It’s worth the effort to work with your broker to match a timeline of monthly musts with your plan. Especially in volatile times like today, your company could face different risks than it did six months ago.
“Although an insurance program may be adequate when it is first delivered, changes in the legal and business climates may cause the coverage to become inadequate as times change and the environment evolves, creating new exposures and challenges,” says Roy Geesa, senior vice president and manager of commercial sales, Gregory & Appel Insurance.