Managing risk is a process of protecting an organization’s assets and reputation by following a five (5) step plan; namely, identifying the exposures which can affect property, human resources, liability, or net income; analyzing the potential impact the exposures could create to an organization; controlling the exposures with techniques to avoid, reduce, prevent, segregate or transfer risk; financing the losses which can occur by using internal or external funds in order to pay for losses at the most favorable cost; and implementing a system to monitor and manage the risk management process.
When managing risk, it is important to not retain more than you can afford to lose and don’t risk a lot for a small reward. And, if you think there is no such thing as an uninsured loss, then think again because it is nothing more than loss retention. No matter what you do for a living, we all have an exposure to ‘risk’; but, it is what we do to manage risk that may matter more. Entrust the management of your risk to someone who understands the unique risks of your business and can guide you in developing a plan that will reduce the cost of your risk.