Why Manage Risk?
Regardless of the size of your business, risk management strategies are essential because:
- People are now more likely to sue in the event of even a minor occurrence. Taking the steps to reduce injuries could help in defending against a
- Courts are often sympathetic to injured claimants and often give them the benefit of the
- Organizations as well as individuals who give professional advice are held to very high
- People are more aware of the level of service that they can expect, and the recourse they can take if they have been
- Corporate and non-profit organizations are often being held directly liable for the actions of their employees, volunteers and directors and officers.
- Big businesses are perceived as having deep pockets, many assets and high insurance policy limits. Corporations are sometimes targeted with inflated or fraudulent claims.
Insurance and Risk Management Can Help Improve Business Operations
Insurance is also a valuable risk-financing tool. Few organizations have the reserves or funds necessary to take on all risk themselves and pay the total costs following a loss. Purchasing insurance, however, is not a complete risk management plan.
A thorough and thoughtful risk management plan is the commitment to prevent harm. Risk management also addresses many risks that are not insurable, including brand integrity, potential loss of tax-exempt status for volunteer groups, public goodwill and continuing donor support. By integrating risk prevention activities into your annual operations plan, you may improve efficiencies and increase capacity.