Risk management is the identification, assessment and prioritization of risks to minimize, monitor and control the likelihood and impact of losses. Effective risk management activities create value and should be an integral part of the decision-making process.
Risk management impacts your bottom line in the following ways:
- Provides opportunities for better pricing on insurance premiums
- Saves out-of-pocket costs like deductibles
- Ensures a safe and stable environment for employees, volunteers and customers
- Helps you understand and be prepared for risks before losses occur
Strategies for addressing an identified risk include the following:
- Risk avoidance, which includes eliminating activities that involve risk and avoiding creating activities that involve risk.
- Mitigation or prevention to reduce the likelihood of losses occurring or lessening the impact of losses should they occur. This is done through managing liability by structuring activities and programs in ways that reduce or limit institutional risk.
- Risk transfer, which means diverting either the risk or financial consequences of a loss to another party. Risk transfer can be done through insurance policies, indemnification agreements, or releases and waivers.
- Risk retention accepts that some risk is inherent in the activities of operation. Risk retention strategies include self-insurance, deductibles, and/or deciding not to purchase an insurance policy for a specific exposure.
At Kapnick, we have a variety of resources to help you manage your risks. These include:
- Seasoned experts and practice groups who understand your business, join industry associations, get to know the people responsible for ensuring safety and loss control – and learn from their first-hand experiences.
- Kapnick risk solutions, with on-site loss control evaluations, comprehensive claim reviews and program design and implementation.
- Kapnick Risk Services Center, a unique program that provides web-based risk management tools and materials your organization needs to help reduce injuries and improve profitability.
- RisKap, a comprehensive risk assessment that solves the problems clients have when buying insurance and managing and controlling risk. By unveiling your insurance score, Kapnick is able to craft a personalized plan of action to mitigate risk as much as possible in order to ensure success of your business.
This article was written by Mark Arbaugh, a partner and property & casualty risk consultant at Kapnick Insurance. Mark drives a proactive team approach toward simplifying complex insurance problems and utilizes data-driven analytics to benchmark companies against their virtual peer groups, offering strategic direction to executive teams. To work with Kapnick’s risk management experts, reach out to us at [email protected] or 888.263.4656. Kapnick has a variety of resources and tools to help you build an effective risk management program.