What is Risk Management?

Risk management involves a number of important considerations. 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.