Your insurance program should be as individual and unique as your business.
The process of defining a program that will best manage your corporate risks is called risk management. It should be included as part of your overall strategic plan.
The following will help you develop a program to meet your unique needs:
Identify and Prioritize: Risks are inherent in every business. A retail store has a high potential for losses due to theft, a manufacturer’s equipment can malfunction and a contractor should be concerned about accidents. Consider these exposures, then prioritize. Which exposure is likely to result in the greatest financial impact?
Deal With Each Risk Individually: Determine the best way to deal with each exposure. Insurance is only one way of transferring risk. Avoidance is another. For example, contractors may ‘avoid’ high-risk jobs. A third is reduction (sprinklers reduce fire damage.) When no alternative is available, insurance protects your assets so you can return to business as usual.
Implement Follow through and protect your business against each exposure.
Monitor: Continuous improvement is an essential part of your plan. Regularly evaluate its effectiveness and tweak it as needed; for example, if a new technology becomes available.
Risk management is a vital part of owning a business, and knowing your assets are protected will give you peace of mind.