Use risk management to complement your business insurance

CLA (Risk Solutions) Ltd

Running an enterprise of any kind involves an element of risk.

Typical risks include:

• Health and safety.
• Environmental risks associated with business operations or external weather or economic conditions.
• Financial risks.
• Regulatory risks.
• Security including buildings and cyber risk.
• Fire, flood and other business interruption risks.

Your insurance policy can cover these risks.

The key is to identify the risks associated with your business, assess the likelihood of the risk occurring and estimate how much the incident will cost your business.

Then decide if the risk can be limited and how much of the risk you need to cover for your business to survive an incident.

Risk management Establishing a risk management plan and undertaking a review of the risks in all areas of your business will help you to identify and prioritise risks and put in place a process to mitigate them.

This will demonstrate that you have a system in place to minimise the impact of an insured loss and will provide your insurers with valuable information they can use when calculating your premium.

It may also help to speed up your claim after an incident, for example:

One of your employees is making a claim following an accident.

You suspect that you were not negligent and the claim is fraudulent.

When investigating your claim, insurers will have to decide:

• Whether the claim meets the policy terms and conditions.
• Can a robust defence be provided by way of documentary evidence or systems?
• Is it worth defending? Defence costs can sometimes outweigh damages awarded.

An effective risk management plan and proper procedures can often prevent an accident or fraudulent claim.

This is always preferable and more cost effective than defending the claim.

Risk management support Insurance brokers are in an ideal position to offer support and advice on best practice and claim statistics to help you to formulate a risk management plan, for example:

Key causes of accidents/claims (Insurance company data)

• Slips and trips 27%.
• Manual handling 20%.
• Struck by/contact with object 17%.

By working with your insurance broker, you can discover how to mitigate some of your business risks to ensure you are minimising incidents and maintaining adequate insurance cover if you need to make a claim.

Call CLA (Risk Solutions) Ltd on 0121 321 4600 to discuss your risk management requirements.