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Time for a Business Risk Assessment

Clients often ask us how they can lower their property and casualty insurance premiums. Some feel these costs are semi-fixed and out of their control. Many believe the best time to get lower premiums is during their annual renewal, but there’s more to it than shopping for a bargain price on insurance once a year. The best place to start is with a comprehensive business risk assessment.

Your business is constantly changing and, therefore, so is your risk. You need to look beyond the numbers and consider the variables that drive them. In doing so, you can create a fundamental shift in proactive safety by simply looking at insurance differently. This can help you develop a systematic approach to managing risk throughout the year and ultimately lower your insurance premiums. Let’s take a closer look at how to effectively use a business risk risk assessment

Starting a Business Risk Assessment
Begin with a broad evaluation of your organization. It’s important to be thorough and objective when reviewing your risk exposure – insurable or not. Consider operational trends, discuss practices that have become lax and review training, onboarding and orientation practices. It’s time  to kick the tires to ensure you’re meeting your employees’ needs.

To propel change, clearly define your assessment. Identify areas of deficiency that may actually be areas of opportunity when it comes to industry best practices. Outline manageable goals for the policy year and make sure there is accountability for completion.

Business Risk Assessment Checklist
Your business risk assessment should cover a wide array of exposures. Review the following items as part of your cross-section business evaluation:

  • OSHA recordable frequency and severity trends
  • Organizational risk control direction and commitment
  • Substance abuse programs
  • Incident investigations and analyses
  • Online tools and resources used to increase risk management efforts
  • Loss trends and loss leaders
  • Claims management practices
  • Emergency response programs, including contingent suppliers
    and disaster recovery
  • OSHA compliance with regulatory programs
  • Contractual transfer processes (your origin for risk transfer)
  • Quality control programs
  • Motor vehicle programs (for both Department of Transportation
    (DOT) and non-DOT drivers)
  • Ergonomics
  • Warehouse policies and procedures
  • Insurance program and design
  • Uninsurable risks (does the balance sheet accommodate
    these exposures?)
  • Cyber risk and prevention

The information gleaned from this review can help you identify problem areas, develop solutions and encourage proactive risk management strategies. Not only can these efforts be good for employee safety and morale, but they can potentially help lower your premiums.

Insurance and Risk Management
While insurance placement is important, renewal planning meetings should also focus on plans to limit loss and reduce exposures throughout the year. Your risk management plan cannot be as simple as signing a few contracts once a year. It must be an ongoing effort on a company-wide basis. Conduct a business risk assessment and discuss the results with your broker. Together, you can create a sound risk management plan that is tailored to your needs and likely better for your bottom line.

This article originally appeared in the 2018 | ISSUE ONE of the SilverLink magazine, under the title “Look Beyond the Numbers | It’s Time for a Business Risk Assessment” To receive a complimentary subscription to the SilverLink magazine, sign up here.

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