We often feel a disaster won’t happen to us or our business, until the unthinkable occurs and it becomes invaluable to have a plan of action. A Risk Management Plan can make all the difference to the recovery of your business, and does not need to be complicated or overwhelming. Having such a strategy in place can actually create increased peace of mind when you feel that you are prepared for the unexpected events that life may bring. Below are three steps to help you create a unique plan for your business, or to improve on a plan you may already have in place. These steps include: taking the time to foresee your risks, estimating their impact on operations and having planned responses in place should they occur.
Step One: Identify the risks applicable to your business
To begin creating your Risk Management Plan it essential to identify all of the potential risks to your business, even if they may seem insignificant or unlikely. Keep in mind the daily operations of your business, all of the employees on your payroll and their various roles and responsibilities.
There are some risks that are fairly common across all industries, but given that each business is unique it is important to make your own list. Some points to consider are:
- Theft, vandalism and arson
- Hacking and cyber crime
- Rent and interest rate increases
- Natural disasters and war
- Employee and customer injuries
- New laws or industry standards
Step Two: Minimise and mitigate identified risks
Once you have identified the potential risks to your business it is time to determine the likelihood of each risk turning into a reality, how this situation could unfold and what the consequences are likely to be. Ask yourself what events must occur for these risks to come to fruition, is there a cascade of problems that must exist or is this a standalone issue that only needs one trigger?
After identifying the trigger events for each potential problem it is time to ascertain which areas you have existing procedures in place to minimise their impact or prevent them from happening at all. There may be some triggers that have no current controls and you discover that you can make adjustments to reduce these risks.
Step Three: Implement your plan
Upon completion of your Risk Management Plan, you need to share this with your employees and any other relevant parties in order for this to become effective. Specifically, people must be aware of the specifics involved with their role in minimising existing risks or recovering from an event. A Risk Management plan can also form the basis for a customised insurance policy tailored to the unique needs of your business. The right insurance program coupled with a strong risk management ethos can be the difference between your business surviving an insurable event or not.
Insurance Brokers can not only provide you with valuable advice in respect of risk management solutions, they will also provide you with a choice of insurance products to compliment the processes and procedures you have in place. Giving you the peace of mind that your business can handle anything that comes your way.
Find your local Insurance Advisernet broker.