Risks to your business can exist anywhere and it can be hard to predict when they will occur. Managing risk is an important part of business, and planning for risks before they occur is often the easiest way to do this.
Risk management is a systematic process of making a realistic evaluation of the true level of risks to your business. Before risks can be properly managed they need to be identified – you can begin with these questions:
What can go wrong?
What can I do to prevent it?
What do I do if it happens?
Some basic risk management measures include:
- Property risk can be minimised by regular building maintenance and good security measures.
- Motor Vehicle risk can be minimised by following your vehicle service plan, adhering to speed limits and avoiding distractions whilst driving.
- Credit risk can be minimised by selecting your customers carefully and implementing a robust collection policy
- People risk can be minimised by providing a safe workplace, regular peer review process and a strong continuing professional development program.
- Professional Liability risk can be minimised by employing professional and dedicated staff, having a client engagement agreement and acting in your clients interests at all times
Others risks to consider include:
- Reputational risks
- Corporate Governance
- Business Interruption and effect on cash flow
- Impact of regulations
- Availability of capital
- Crime / Fraud
- Information Technology risk
- Human Resources
- Natural Disasters
- Loss of Intellectual Property
- Environmental Impact
- Local and Global economic conditions
A good plan is to develop a risk register to document each potential problem, its level of seriousness, what is required to fix it and who will fix the problem.
Transferring risk by way of an insurance program is good risk management, but it is important to understand that insurance is a small part of an organisations total risk management program.
At Focus, we take the time to understand your internal risk management program and sell this to insurers. This can make a significant difference to the premium you pay.