Risk Tip: How to tailor a risk management program

An organization’s risk management (insurance) program must be tailored to its overall objectives and should change when those objectives change.

Comment: An insurance broker/advisor cannot recommend insurance products and services without knowing what the client actually does, how they do it and what is important to them with regard to their insurance program. Once it is known what they do, how they do it and what their objectives are they can be better advised in terms of coverage and exposure to risk. However, many times this step in the risk management process is overlooked or not addressed in the detail that it should be. Unfortunately, in the haste to sell product coverage issues, exposures are often missed. In addition, every business is a moving target, in that, it is constantly changing and/or the business environment around them is changing. To further that thought, brokers/advisors have to continually keep in touch with their clients in order to find out where they are taking their businesses and how they intend to go about it.

  • Have operations changed?
  • Are any mergers or acquisitions on the horizon?
  • Has there been a bump in the number of employees?
  • Are there any new tenants that may create an increased hazard?

By paying close attention to the client’s business operations and understanding their objectives, a true risk management program can then be developed and managed. Over time this will serve to limit their exposure to new risks and thus save money.

Bottom line: Have a detailed risk analysis performed of the business exposures you face along with a review of your business plan. Then develop a plan to address those exposures.

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