Risk & Business Magazine Miller Insurance Spring 2017 | Page 27

RISK MANAGEMENT
“YOU CAN HELP CONTROL THE COST OF YOUR
INSURANCE PREMIUMS AND IMPROVE YOUR BUSINESS
OPERATIONS BY ADOPTING RISK MANAGEMENT
STRATEGIES. RISK AWARENESS AND MITIGATION
ACTIVITIES CAN ADD UP TO A SAFER WORKPLACE AS
WELL AS GENERATE POSITIVE BRAND RECOGNITION.”
W
HAT IS RISK?
Risk, in insurance terms, is
the possibility that a loss
or other adverse event may
potentially interfere with
an organization’s ability to
fulfill its objectives. Risk is also an event for
which an insurance claim may be submitted.
WHY MANAGE RISK?
Regardless of the size of your business, risk
management strategies are essential for
numerous reasons:
• People are now more likely to sue in the
event of even a minor occurrence. Taking
the steps to reduce injuries could help in
defending against a lawsuit.
• Courts are often sympathetic to injured
claimants and often give them the benefit
of the doubt.
• Organizations as well as individuals who
give professional advice are held to very
high standards.
•
People are more aware of the level of
service that they can expect and the
recourse they can take if they have been
injured.
• Corporations and nonprofit organizations
are often being held directly liable for the
actions of their employees, volunteers,
directors, and officers.
• Big businesses are perceived as having deep
pockets, large assets, and high insurance
policy limits. Corporations are sometimes
targeted with inflated or fraudulent claims.
INSURANCE AND RISK MANAGEMENT CAN
HELP IMPROVE BUSINESS OPERATIONS
Insurance is a valuable risk-financing tool.
Few organizations have the reserves or
funds necessary to take on all of their risks
themselves or pay the total costs following a
loss. Purchasing insurance, however, is not a
complete risk management plan.
A thorough and thoughtful risk management
plan involves the commitment to prevent harm.
Risk management also addresses many risks
that are not insurable, including brand integrity,
potential loss of tax-exempt status for volunteer
groups, public goodwill, and continuing
donor support. By integrating risk prevention
activities into your annual operations plan, you
may improve efficiencies and increase capacity.
BOTTOM-LINE BENEFITS OF MANAGING
RISK
Risk management provides a clear and
structured approach to identifying risks.
Understanding all known and anticipated
risks allows an organization to measure and
prioritize them as well as take the appropriate
actions to reduce the potential for losses. Here
are other benefits an organization gains by
having an effective risk management plan:
• Save resources such as time, assets, income,
property, and people
• Protect its reputation and public image
• Prevent or reduce legal liability and
increase the stability of operations
• Protect people from harm
• Protect the environment
• Enhance its ability to prepare for
circumstances that could interrupt
business
• Reduce liabilities
• Assist in clearly defining insurance needs
While it’s not possible to eliminate all potential
risks, a risk management plan demonstrates
your organization’s commitment to loss
reduction and prevention. Ultimately, it
can make your organization a better risk to
insure. Talk to your insurance representative
for specific advice about coverage and risk
management best practices that suit your
industry. +
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