Risk Management by definition is the practice of protecting an organization from financial harm by identifying, analyzing, and controlling risk at the lowest possible cost.
This is a very blunt definition that should be top of mind when discussing the purchase of an insurance product or discussing other risk management techniques. The challenge is to think about ways in which to reduce costs, properly communicate the pros and cons of each choice and arrive at the proper solutions that will best protect the organization.
Now add to that definition ACTIVE identification, evaluation and management of all potential hazards and exposures to loss that a company may experience. It is absolutely essential that you keep informed about things going on around you — locally, nationally, and internationally — that bristle with the potential to affect your business/organization in an adverse way. Once you recognize a certain “exposure”, you must act on it one way or the other. And, obviously, one of the “act on it” steps may be classic insurance.
And finally this process should be CONTINUOUS. It’s not appropriate to establish or simply renew your insurance program and then put it up on the shelf until next year. Risk management is a constant practice that begins even before a policy is written and does not really end at all. It is a work in progress where you continually look to improve coverage, terms, conditions, claims reporting/handling, loss control/mitigation, exposure analysis/identification and the like, year after year.
Protecting your organization from financial harm is the #1 goal. Doing that, at the least possible cost, is admirable (but not practical) – you must be actively involved in recognizing potential exposures and hazards on a continuing basis throughout the year.
Jump in with both feet and ask, “How can we improve our risk management program today and tomorrow and beyond?” That’s a question you should consistently consider.