Small Business Should Consider the ERM Approach

Current economic conditions are driving changes to companies’ risk management strategies, and even smaller companies are being forced to take a more strategic approach to managing risk. One way to take this strategic approach to risk management is with enterprise risk management (ERM) – a business strategy gaining widespread acceptance in businesses across the country.

The ERM process allows organizations to better manage their risk. But is it appropriate to your small or medium-sized business? Almost certainly.

Until recently, this system has been implemented primarily in large corporations. But, according to Jay Vadiveloo, actuary and ERM specialist, it may be time for the small-business sector to adopt the ERM approach: “With all of the uncertainty and turbulence in today’s economy, positioning small businesses to mitigate risks and maximize opportunities has become key to their survival and success,” he suggests in a Huffington Post blog posting.

ERM helps businesses of all sizes manage an organization’s key business risks and opportunities. Whether the threats are internal like auto losses or external like supplier problems, business owners must recognize and manage forces that could disrupt their companies.

Opportunities must be managed, as well. ERM is set up to ensure that everyone in your company has access to important information relating to potential problems and opportunities.

Why is this information flow important? In many organizations – even smaller ones – everyone is too preoccupied with getting the job done to make a point of sharing information. As a result, vital information ranging from financial concerns to corporate strategies and employee relations is centralized with a few of your key people. It may even reside exclusively with you, never reaching your employees.

This means that essential decisions are often made without adequate information. Employees don’t always intend to hoard information, but even in a smaller organization, there may be personality conflicts and disagreements that limit sharing of information. It’s incumbent on you as the boss to ensure that information is shared.

With an ERM approach, your employees are encouraged to identify roadblocks or hazards that could interfere with your strategic goals.

The same is true of opportunities. For example, if one employee learns of a way your inventory management can be improved but doesn’t think to share this information with his or her supervisor, your business may lose out on a system that could have helped floor the competition.

Strong communication is the basis of ERM. Every one of your employees – salespeople and supervisors alike – should be empowered to consider and discuss ways of identifying potential problems and taking advantage of opportunities.

If, as the owner of a small business, you decide to implement a formal enterprise risk management system, you may need the services of a consultant. However, companies of all sizes can benefit from the approach without signing up for a full-fledged implementation.

Ensure every employee has access to information, and empower each one to look for both problems and opportunities and share his or her findings with a supervisor. Risks will be controlled and opportunities acted upon.

Why You Can Smile as You Write Your Premium Check

No one likes writing checks for insurance premiums. However, insurance provides business owners with many benefits, including peace of mind. Here’s a list of benefits that may make you feel a little better the next time you write that premium check.

  • Few business owners can afford to rebuild a building or replace damaged merchandise.
  • Insurance companies provide expert loss prevention assistance to help you solve loss exposure problems you may face.
  • Insurance allows you access to credit so you can expand your business.
  • If you can’t continue operations after a loss like a fire, insurance is available to provide you with continuing income.
  • Insurance provides expert medical treatment to your employees if they are injured after an accident.
  • Insurance can help smooth out difficulties you may experience if you or your business partner becomes disabled or dies.
  • Insurance provides your family with an income if you die.
  • Insurance allows you to comply with state regulatory agencies.
  • Insurance can protect your products when they are shipped.
  • Insurance helps to protect you from legal liability if you are faced with a lawsuit from an angry customer, competitor or group.

When you write your next premium check, consider the many benefits of insurance. You want to spend your time growing your business and spending time with your family; enjoy the peace of mind insurance offers.

How to Avoid Possible Risks and Travel Safely

Americans love to travel, but there are risks in traveling, whether at home or abroad. Here are some tips to help keep you and your family safer when traveling.

On the road

  • If you must carry cash, carry it concealed in a money belt or similar case.
  •  Keep photocopies of important documents like your passport, driver’s license and credit cards. Record your traveler’s check numbers and keep them separate from the checks.
  • Store an emergency contact in your cell phone under “Emergency.” This is where first responders will look if you cannot communicate.
  • Do not post your travel plans on social media. Burglars watch social media for opportunities to steal.
  • Have a mechanic evaluate your car’s roadworthiness prior to travel.
  • Carry a first-aid kit, plus extra clothes, snacks and water, in your vehicle.
  • If your car does break down, keep everyone together. Don’t split up to go for help.

In your hotel

  • Ask for a room above the first floor and below the fourth.
  • Determine the most direct route from your room to fire escapes. Count doors so you know how far you are from the exit in case you must exit when visibility is low.
  • Do not open the hotel room door if you’re not expecting anyone.
  • Do not travel with jewelry or other valuables. Use the room safe if you do have valuables.

When you sightsee

  • Ask hotel staff for directions before you go out.
  • Vary the times you leave and exits you use. Kidnappers watch for patterns.
  • Ask hotel staff which parts of town you should avoid.
  • Keep a closer-than-normal watch on children.
  • Trust your instincts. If something doesn’t feel right, leave or go into a crowded building until you can decide your next step.

Take These Steps So Your Home Doesn’t Shout, ‘We’re Away’

Whether you’re taking off for a holiday in the sun or a visit with relatives out of town, here’s something you don’t want to forget. An unoccupied home is subject to many hazards, so to avoid an insurance claim, take preventive measures before you leave. Below are some things to do to protect your house while you’re gone:

  • Ask a neighbor to watch your home for damage or suspicious activity. Make sure you leave a spare key and a phone number where you can be reached in an emergency.
  • If you live in one of the cooler parts of the country, keep the heat on in your home in winter to avoid frozen pipes. Letting pipes drip slightly in freezing weather can help prevent them from bursting.
  • Unplug electrical appliances and computer equipment to protect against power surges. If you use a surge protector, ensure it’s sufficient.
  • Stop mail delivery and newspapers. Nothing shouts “We’re away” like papers piling up on your porch.
  • If your home is in or near a flood zone, put important papers and electronics out of harm’s way.
  • Trim trees and bushes from doorways and windows. Potential thieves will feel exposed. Also trimming branches may prevent wind damage to your property and others’. You can be held responsible if your neighbors allege that your lack of maintenance caused damage to their property.
  • Ensure you purchase enough insurance to cover any possible claim. No one expects to have a loss, but if you do, you want to be adequately protected.

The ACA Gears Up for Major Changes in 2014

The health care landscape changed for Americans with the signing into law of the Patient Protection and Affordable Care Act (ACA). When it was introduced in 2010, the ACA brought with it a new approach to health care and a commitment to affordable health care for everyone.

Over the past three years a number of important initiatives have been taken. For example, people with pre-existing conditions, who previously had found it very difficult to obtain coverage if they had cardiovascular disease, diabetes or many other chronic illnesses, now have access to coverage through temporary Pre-Existing Condition Insurance Plans (PCIP). In 2014, these programs will end, as those suffering chronic conditions will be guaranteed coverage in the open insurance market.

Actions undertaken in 2012 include:

  • In August of last year, more than 12 billion Americans received insurance premium rebates of approximately $150 per family.
  • A new user-friendly form was introduced, making it easier for consumers to compare co-pays and out-of-pocket costs for different insurance plans.

For 2013, the Act is implementing:

  • Improved coverage for preventive care through the provision of extra funds to Medicaid programs that support preventive care programs at minimal cost. This took effect on January 1, 2013.
  • Also effective January 1, the government is funding an increase to primary care doctors, who will now receive no less than 100% of Medicaid rates for primary care services.
  • The Children’s Health Insurance Program (CHIP) will provide states with two additional years of funding for coverage of children who are not eligible for Medicaid, effective October 1, 2013.

In 2014, several major changes will be implemented, including the requirement that most Americans will have to have health insurance or pay a tax penalty. The act allows for health care exchanges that offer affordable private insurance coverage to individuals and small businesses, expanding everyone’s options.

Start 2013 Off Right With a Health Insurance Checkup

Why not start off this new year with a health insurance checkup?

Over the past few years, there have been significant changes in our approach to health care. The Patient Protection and Affordable Care Act (ACA) was passed into law in 2010, and some provisions have already been implemented, but there are many ACA changes still to take effect.

Most important, the majority of Americans will be required to have some form of health insurance by January 1, 2014.

You may want to start now to investigate your options and become aware of the ACA provisions that are relevant to you and your family. (For example, one key provision may make it easier to obtain coverage with pre-existing conditions.)

So step one in your review is to examine the impact of the ACA. Set up a time to consult with your insurance professional, who can help guide you through the complexities, or research the ACA yourself at

As part of your review, you may also want to revisit your health insurance plan. If your marital status has changed or your family has expanded, you should look closely at the benefits and make changes as required.

Also ensure your insurance company or employer has your updated information on file (including your new address, if you’ve moved).

While the ACA changes the approach to health care, it’s clear there’s a place for individual responsibility. Start the new year off right and make sure your health insurance plan still works for you.

Change in Procedure Is Good News for Beneficiaries

Nationwide Financial Services Inc. and several other major insurance companies, including MetLife, Prudential Financial and Manulife Financial’s John Hancock division, committed to changing practices after an investigation established that many insurance policy beneficiaries did not receive the death benefits they were owed. And this will come as welcome news to individuals who have or are considering life insurance.

Nationwide and other major insurers agreed to change the way they previously identified deceased policy holders and to actively seek out beneficiaries who, because of a long-standing insurance industry practice, failed to receive death benefits. Nationwide also paid $7.2 million to the insurance departments of seven states participating in the investigation.

A death benefit is the amount a life insurance company pays a policy holder’s beneficiary upon the policy holder’s death. In the past, most life insurance policies made it clear that beneficiaries are responsible for notifying the insurer when an insured person dies. However, many beneficiaries didn’t realize this. As a result, thousands of people did not receive benefits.

A task force led by Florida Insurance Commissioner Kevin McCarty found that a number of life insurance companies failed to pay out more than $1 billion in death benefits as a result of the procedure that required a policy holder’s beneficiaries to file a claim after his or her death.

Nationwide, as well as other major insurance companies, will now check their lists of policyholders against the U.S. government’s death database and have committed to tracking down beneficiaries of customers who have died. From the end of 2011 to mid-October 2012, Nationwide had identified 4,747 unclaimed death benefits and paid out $144 million to beneficiaries.

Individuals with life insurance policies – or those contemplating the purchase of policies – can now be certain that their beneficiaries will receive the death benefits they are entitled to … whether or not they file a claim.