CBG Insurance Brokers Ltd
Risk Management
All businesses are faced with risks on a daily basis. The pure risks faced by a business can result only in a loss to the organisation, whereas with the speculative risks you take, either a gain or a loss may result.
Proactive risk management of your business is concerned with the eradication or minimisation of the adverse effects of the pure risks to which you are exposed.
The process of risk management involves identification, evaluation and control.
Risk Identification may include a number of techniques including physical inspections, safety audits, job safety analysis as well as the study of past accidents and claims.
Risk Evaluation would be based upon the business, economic and legal considerations.
Risk Control strategies may be classified into four main areas: risk avoidance, risk retention, risk transfer and risk reduction.
Risk Avoidance involves a conscious decision by a business to avoid completely a particular risk by discontinuing the operation producing the risk. This pre-supposes that the risk has been identified and evaluated.
Risk Retention by a business requires any consequential loss being financed by the business. However, there are two aspects to consider namely risk retention with knowledge and risk retention without knowledge.
Risk Transfer usually takes the form of passing your liability for potential losses to another i.e. an insurance company, or the related party in a business transaction.Risk Reduction principles rely on the reduction of risks within a business by implementing a loss control programme with the basic aim being to protect assets from wastage caused by accidental loss or damage.
