Safety & Managing Risk

What is Risk Management and does it apply to my business?

For a long time risk management was thought of as a tool for the larger businesses. However, for a number of mid-sized businesses, those in which the people responsible for the insurance programs wear a number of management hats, the insurance hat is worn only a limited number of days per year. Many times the person responsible for managing the insurance program will be the first to admit that he or she is not managing the risk as much as buying insurance policies and hoping not to forget anything along the way. Risk management involves a number of important considerations. For the purpose of this article we will focus on risk management in the area of state and federal compliance issues. The objective of risk management is to conserve the physical assets of the business using techniques and procedures that do not necessarily include purchasing more insurance. The First step is to identify all the potential exposures a business faces. Exposures could include being sued by a former employee, having a current employee file a complaint with the Department of Labor or losing a key customer. It could also be OSHA showing up for an inspection, or not knowing the most recent changes in Federal regulations. In every case, the potential exposures are unique and can only truly be uncovered with a thorough understanding of the management and operations of a business. When done properly, risk management will go beyond insurance and those who implement the techniques generally see a reduction in premium costs as well as a positive impact on their bottom line.