Risks that threaten your business’ viability lurk around every corner. While pursuing opportunities, it is vital for business owners to protect themselves from unforeseen damages and liabilities.
People are quick to sue these days. Lawyers are quick to capitalize. Litigation is the preferred method of conflict resolution. If your business should find itself on the losing end of a lawsuit, chances are your business will be completely wiped out.
Don’t let that happen. Follow these steps for effective risk management, and NEVER
Directors' and Officers' Liability-
who legally have three basic duties: diligence, loyalty and obedience—may be liable for failure to act in accordance with a statute or non-compliance, such as mismanagement, financial losses, wrongful dismissal, employee discrimination
or failure to remediate environmental damage.
Ignorance and resignation are not valid defenses and, subsequently, directors may be held liable for nonperformance and board indemnity may not suffice. Providing awareness training in negligence and liability, preventing conflict of interest, establishing formal reporting systems, documentation and legal representative are all essential precautions.
Fleet Risk Management-
Most all businesses have transportation operations
in some form. Vehicle accidents are the greatest source of loss for many organizations and taking the time to implement fleet loss prevention methods can save time and money. Generally, an employer is liable for the negligence of its employees while they are operating vehicles or equipment on the job.
In addition to purchasing coverage, business must also comply with The Motor Vehicle Safety Act and The National Safety Code. To further protect the company, practice preventative maintenance, create fleet policies and safety manuals, require regular training and publicize safe driving.
Deserving particular attention as the holiday season is now upon us, liquor risk management is paramount. Liquor liability covers a range of functions, including liability as server, liability as an occupier, liability as an employer and liability as a sponsor.
To safeguard a business from liquor-related accidents or damages companies should strictly enforce alcohol policies, comply with legislation, obtain permits, publicize policies, regulate consumption and even purchase insurance with higher limits.
Premises Risks: Liability Loss Prevention-
Liability loss prevention is any measure taken to prevent
or minimize property damage or injury of a third party. While generally common to begin with, liability losses include property that you are being paid to work on, property belonging to people other than clients/customers, injury to clients/customers either on your premises or off premises at a job site and injury to people other than clients/customers who may be in the vicinity of your premises or job site.
By strategically considering all of the potential liabilities faced by your organization, resources can be allocated to operations more susceptible to liabilities. As always, draw up policies and procedures, perform frequent inspections, provide adequate warnings and implement security measures.
Premises Risks: Physical Loss Prevention-
Related to liability loss, physical loss prevention can lead to direct premium savings, but a thorough evaluation and cost/benefit analysis should be done before installing physical protections. That said, every business is vulnerable to fire, crime and weather damages. Physical loss prevention starts with compliance in regards to government regulations, codes and standards
Furthermore, fire detection is mandatory as is education and evacuation procedures in the event of an emergency. On top of commonsense initiatives like emergency codes, reducing everyday risks and designating smoking areas, purchasing sufficient insurance to guard against the unknown is highly advised.
-At some point, your company will either manage or sponsor an event
, and with that responsibility comes liability. The unknown is especially present at events where control is more fleeting than the everyday office environment. Injury risks to employees, volunteers and event attendees are very possible. A company’s reputation may be irrevocably damaged if the event is handled poorly. On the more benign scale, financial loss is a real risk for any number of reasons.
To safeguard the company from such risks, a comprehensive planning phase should outline all potential risks, appropriate accommodations should be made, insurance representatives should be included in the planning and allow for open communication channels between event planners and attendees.
“Best in Class”
Many companies may know that insurance companies do rate individual business, which is used to gauge premiums. However, many companies fail to realize that insurance companies rank companies side by side. To get the best rates and coverage, you can highlight your company’s risk management measures. Insurance insiders call this ‘best in class
To reach this class, create a relationship with an insurance representative, carefully prepare the application, included all requested information and document the company’s activities.
Effective risk management will protect not only your company’s assets, but your company as a whole.