Risk Management

"Getting your arms around the risk management dilemma..."

To businesses and individuals, risk is the continuous possibility of loss to valuable resources.  Risk Management is the effort to reduce risk, to mitigate it.  Valuable resources refer to the people property and financial capital which cause families and businesses to exist. Risk to these resources is managed with the following methods:

• Risk Transfer
• Risk Prevention 
• Risk Retention

 RIsk Transfer Means Insurance

Transferring the risk of loss to a third party is the practice known as insurance.  Individuals and businesses engage in this practice because it has proven to be a cost effective method of managing risk.  For a premium, usually known in advance, insurance companies accept the possibility of  loss to people, property, and financial capital.  Should a loss occur, the company indemnifies the insured, subject to the terms of the insurance policy.  Used in combination with risk prevention and risk retention, the cost of insurance can be minimized and so can the overall risk of loss to resources.

Risk Prevention Means Safety Management

Through risk prevention, also known as safety management, businesses and individuals attempt to keep a loss from adversely impacting valuable resources.  Just as resources are continously exposed to closs, safety management is a continuous effort of risk prevention. Safety is undertaken for both financial and emotional reasons.  The financial reasons are the natural desire to preserve resources and to reduce the overall cost of insurance.  An insurance ompany is more likely to offer consistently lower premiums on property, liability, life, and health insurance if it is believed for good reason that the insured is well-grounded in safety-mindedness.  To the extent that this is not the case, insurance will become unaffordable, or worse, unavailable.  From an emotional standpoint the benefits of safety are great.  The loss or impairment of human, property or financial resources bring with it a high probability of low morale and the resulting probability of resource devaluation. With regard to method, safety management is achieved through the development of systems to prevent accidents, injuries, property damage, or other adverse occurrences in a home or business.  Understanding that risk cannot be eliminated, safety management sets forth contingincy plans to mitigate loss once a peril strikes and impairs valuable resources.  A safety management system first studies the nature of an entity's valuable resources and the most likely loss contingencies that threaten them.  Once complete a system can be installed that works to prevent risk from occurring.  The success measure of a safety management program is the quantifiable reduction in the frequency and severity of loss to people,property and financial capital.

As Unpleasant as it is to Consider, Family Members are Exposed Each Day to the Risk of Accidents, Illnesses, and Death, all of Which Can be Financially Mitigated through Life, Health, and Disability Insurance.  Businesses Mitigate this same Risk through the Use of Worker Compensation / Employer Liability Insurance. 

Losing sight of your most valuable resources will skew your entire insurance plan.  Focus on these and your plan will remain affordable year in and year out.

 Protective eyeware, work gloves, and head gear is not only a practical safety measure, but these devices also help to make employees more efficient.

The greater the operational hazard of a business, the greater the need for safety and formal safety programs.

Cash resources are those things most exposed to lawsuits from third parties and employees.  Cover these exposures with liability insurance: general, auto, cargo, pollution, employer, employment practices, etc.  Determining the portion of this risk to retain sometimes require sophisticated calculations that can save thousands of dollars in insurance premiums.

Combining safety management with worker compensation and employer liability insurance give a business the confidenece it needs to take calculated risks in the marketplace which lead to the maximization of wealth for shareholders.

Risk Mangement and Transway

Transway Insurance Agency, LLC offers insurance products, safety management facilities and proprietary risk retention formulations for virtually any size organization.  Call us today for a professional consultation.  You will not only be taking the first step toward reducing the overall level of risk that your business faces, but you will doing so with experts focussed on the lowest cost possible.