Even the most well-structured and prudent businesses encounter unexpected risks and situations along the way to success. A risk management plan is designed to mitigate potential liabilities for your company. Developing and implementing an effective risk management plan for your business is essential to its success. It involves evaluating areas of risk exposure and determines whether those risks should be self-insured, or transferred to an insurance company through the purchase of a policy. Even if your business can’t entirely avoid risk, you can effectively anticipate and mitigate risks through an effective risk management plan.
What is a Risk Management Plan?
Risk management refers to the process of identifying potential negative risks and taking proactive steps to minimize them. A risk management plan is a comprehensive document of your organization’s risk management process. Its development requires close collaboration between multiple entities including senior executives and key stakeholders, as well as insurance agencies, to create a plan that doesn’t compromise your company.
Risk management planning covers the entire approach, from risk identification and assessment to response and documentation. The central goal of risk management planning is to mitigate the impact of potential risks and financial liabilities to your organization.
Tips for Risk Management Planning
- Learn Your Necessary Coverage
- Identify Additional Risk
- Eliminate Risks
- Talk With an Expert
- Reassess Strategy Annually
1. Learn Your Necessary Coverage
As easy as it can be to perceive insurance as a pesky cost, the federal government does mandate that every business with employees have a workers’ compensation, disability, and unemployment policy. Insurance laws can also vary by state, making it important to research exactly which policies your business requires. When set up in the right way, insurance can be one of the best values added to your business. Risk management planning can effectively minimize the damage caused by unforeseen events and circumstances, which in some cases means saving your business altogether. All businesses face insurance risks, but the specific coverage your business requires may vary depending on multiple factors including your industry, location, and technology.
No matter your need, our agents here at Moody Insurance have extensive industry experience ranging from construction to real estate to manufacturing. Our team can also provide custom recommendations based on your organization’s needs so you receive the ideal coverage options. Contact us today to get started.
2. Identify Additional Risk
Foreseeing possible risks is a key step in risk management planning. Identifying potential risks requires looking at every area of your business that could be impacted, including operations, personnel, relationships, processes, as well as external influences. Many of the most common additional risks that are often overlooked include data breaches, property damages, and human capital damages. Certain service providers such as accountants, consultants and web developers also seek the potential damage of customers seeking legal recourse if their product does not meet expectations. The more educated you are about potential risks, the better equipped you will be to manage and react to damages that may have gone otherwise unforeseen.
An effective loss control insurance policy can reduce severity of loss within your organization while simultaneously improving the safety of your staff. Our comprehensive loss control services include conducting a comprehensive review of current policies and safety procedures. To learn more about the specifics of our loss control policies, you can call us at (303)824-6600 or fill out our contact form here to send us an email and one of our team members will be in touch soon.
3. Eliminate Risks Within Your Business
One of the first steps to any successful risk management program is identifying potential risks already existing within your organization. A few of the most common internal risks that can wreak havoc if not accounted for include injuries to employees, data breaches, and business interruption. Oftentimes, the best way to eliminate risks is to prevent them in the first place. Ensuring your employee training measures, safety parameters, and equipment are up to industry standards can go a long way towards mitigating potential risks.
4. Talk With an Expert
Sometimes, your business encounters a legal situation that you have not seen before. Talking with a risk management expert can help you sort out any licensing, employee relations, or trademark concern without having to fret over the legal implications yourself. Risk management experts are seasoned professionals who have handled a variety of claims and situations. Their primary goal is to identify and manage risk management issues by identifying, measuring, and making decisions on operational or enterprise risks for your organization. Risk management experts can also develop contingency plans to deal with emergencies when needed.
A risk management plan is strong as its capacity to effectively and fairly address losses. Our seasoned experts can help you discover the most effective risk management strategy for your business. Get a consultation today to discuss solutions to any employee or business management question.
5. Reassess Strategy Annually
In order for your risk management strategy to be as effective as possible, it is essential that you reassess it at least once per year. Risk management planning often becomes more effective as your business grows. As new legal situations and claims arise, you can implement new solutions into your plan. Sometimes, despite your best efforts, not all risks can be completely eliminated. In these cases, you can take these risks into account and realign your strategy to mitigate them as much as possible.
At Moody Insurance, we believe that the more educated you are about potential risks, the better prepared you are to handle them should they arise. Our risk management services provide care and protection to multiple areas of your company so you can make informed decisions about your business’ future.
The Importance of Risk Management Planning
Having an efficient and well thought-out risk management plan is a logistically prudent strategy. It enables you to be proactive rather than reactive against potential risks, which can go a long way towards mitigating risks and damages. Building a risk management strategy also makes financial sense because it allows businesses to prepare themselves for potential financial repercussions. For any business, assessment and management of risks is the best way to prepare for situations that may come in the way of progress and growth. When your business evaluates its plan for handling potential threats and then develops structures to address them before they occur, you improve the odds of succeeding when things go awry.
Discover Risk Management Solutions with Moody Insurance
If you’re ready to discuss the risk management policies available to you today, contact our team or call us at (303) – 824 – 6600. As one of the most trusted resources for risk management in the state of Colorado, we provide a variety of services including loss control, claims, and in-house counsel. You can also explore our database of industry resources and insights to help you stay up to date on the latest developments in the insurance industry.