Is Insurance the Solution to Managing All Business Risk?

While insurance may offer protection against many business risks, no single policy or combination of policies will protect a business from the myriad of risks faced by the business, the business owners or their employees.

It is essential for the business risk manager/business owner to:

•        Identify potential risks: What can possibly go wrong?
•        Measure frequency and severity of risk: What is the likelihood of the risk occurring and if so what is the impact?
•        Examine solutions: What are the most effective ways to treat the risk?  Should you:

        – avoid it;

        – reduce the risk by limiting exposure;

        – transfer it (outsource part or all of an operation to another or purchase insurance to cover the risk) or;

        – retain it (self-insure or insure with high deductible plan)

•        Decide which solution to use and implement the solutions.
•        Monitor the plan and regularly review the results.