Life is uncertain and full of surprises. But there are ways to plan ahead and prepare for unexpected events.
Risk management is a process of identifying, analyzing, and prioritizing risks with the goal of reducing or avoiding harm or business loss. Risks come in all shapes and sizes and may include:
|Environmental Risks: Tornados, fire, flooding, or earthquakes
|Operational Risks: Labor strikes, computer hacking, or business fraud
|Health and Safety Risks: Customers and employees injured while on your property
|Strategic Risks: Loss of reputation and/or management changes
Business owners know that preparation is the key to success. Once success comes, don’t let one unexpected incident wipe out your business. Assess risk by considering the probability of an event and the impact it would have on your business.
Writing a risk management plan is an excellent idea for all business owners. The plan will allow you to outline your specific risk strategies, responsibilities, responses, and mitigation. It’s a playbook for the unexpected, a roadmap to guide you during uncertain times.
Depending on the size of your business and your available resources, you may wish to hire a risk management consultant. These trained and objective professionals can help you identify risks and threats you may not have considered, thus saving you time and money in the long run.
What do I do after I create a Risk Management Plan for my Business?
Once you have a risk management plan in place, you must implement your strategy. Following are some good steps to consider:
- Ensure that leaders and top managers understand the plan and support it.
- Inform your employees that you now have a risk management plan in place to protect the business and their jobs.
- Conduct training about the plan so everyone is operating from the same set of principles.
- Post the plan in highly visible areas and/or on your intranet.
- Select responsible leaders to implement the plan.
Finally, speak with your insurance agent to guarantee you have the right types of coverage to protect your assets. Based on your risk management plan, determine if you need general liability, property, worker’s compensation, and/or umbrella liability coverage. When you have a solid risk management plan in place and the proper coverage, you can rest assured you’re ready for the unexpected.
Special thanks to our Beyond Insurance partner Millhiser Smith in Iowa for this information!