Risk Management and Insurance needs Las Vegas, NV

By: Mary Thompson (Capstone Brokerage President) May 26, 2015

Risk Management is a process that involves identifying a company’s risk by an in-depth analysis. Once the risks are identified a business should then try to reduce, eliminate, or transfer the risk. As a business, simply having insurance is not enough. Risk management is a crucial part of a business’s structure. If you don’t know where you have a risk, then how can you properly be protected?

How do I identify potential risks? Well that depends on the type of business you operate. Think about what the potential risks are. All businesses should have some form of Risk analysis completed on a regular basis by an outside company to help identify risks. Here are two situations that require both risk management and insurance:

In the construction industry the highest risk for a business is typically serious injury on the job. As far as risk management is concerned, the first step is to have a strong written safety and training program in place. The next step is to make sure that the program is actually implemented and adhered to. The communication of the program is a key element to help prevent injuries. Most on the job injuries could be avoided by simple training. Insurance protects a business from the financial aspect of injury in the form of worker’s compensation, general liability, and even a business owner’s policy.

In the manufacturing, or product industry, there is a large risk in both product safety and copyright infringement. The obvious risk is product safety which comes to consumer protection. This is why products by companies, such as Fisher Price, go through rigorous testing prior to being released to consumers. The testing is part of risk management. Insurance will protect the business from product defect, copyright infringement, and litigation issues in the form of Product Liability.

Think of insurance as a means to replace a monetary loss. If a building burns down, or is vandalized, property insurance replaces the loss in building funds or asset value. However, there are losses that money simply cannot replace such as failure to recover data from damaged computers – this requires risk management. The protection of data can come in the form of offsite computer data backup etc. While insurance may replace the computer, it can’t replace the data.

Insurance is used to transfer risk by covering the company. Risks that have an automatic need for insurance are product liability, workers compensation, and property ownership. These types of Risks are easily covered in most cases protecting the business. Insurance products serve as risk management tools for a company by allowing them to take on the small negative of having to pay premiums while giving up the potentially large negative impacts of being victim to an uninsured event.

Companies that have a risk management regimen in place will benefit from a lower rate of claims; they are also eligible for lower insurance premiums. Safety programs and safety training can greatly reduce the number of injuries sustained in a work environment.