Setting Higher Standards: Why a Risk Control Strategy is Important for Your Business
In every business venture, there is inherent risk. These risks can come from both inside and outside your business, and can take a wide variety of forms, from natural disasters to accidents to employee error and faulty products. Managing these risks is one of the most important aspects of running your business, and successfully managing these risks means having an appropriate risk control strategy that helps to protect the business and hold it to high standards of operation.
Risk Control Strategies
Risk control is the aspect of a risk management program that evaluates the potential losses for a business, based on information from the business’ technical aspects, as well as financial policies and other impactful parts of the business. Risk control strategies use these findings to reduce risks in vulnerable areas of the business.
Risk control strategies often involve the implementation of regulations, changes to policies within the company, and the establishment of new procedures within the business to proactively prevent future damage to the company and its property and employees from a variety of risks.
The Importance of Liability Trends
Tracking trends in liability insurance coverage is an important aspect of risk control, and the data can help you to choose additional coverage options that you may not have thought of as you prepare to purchase liability insurance. When it comes to protecting your business from risk, the top priority is to have a good general liability insurance policy. While most businesses have liability coverage, it is not so encouraging when it comes to coverage additions. These coverage additions may be expansions on the general liability policy overall, or they may be highly specific such as inland marine insurance, which provides coverage for job site equipment, or builder’s risk insurance, which is important protection for construction sites.
How to Implement a Risk Control Management System
The first step in implementing a risk control plan is to identify the risks. Risks will be either positive or negative depending on the customer and financial goals of your business, along with the specific process that your business uses to deliver your products or services and the resources available to improve the business and employee performance.
Using this information, known as a strategy map, you can identify the potential risks to the business. Types of risks include events that make the business less appealing to customers (customer perspective); events that prevent the business from producing the products or services promised (process perspective); and events that impair resources that the business relies on to function successfully (learning and growth perspective).
The Hierarchy of Risk Control
A comprehensive risk control strategy will include a combination of different measures and maneuvers, though the specifics of that combination will depend on the risk situation being assessed. In general, though, risk control strategies follow a fairly specific hierarchy of control measures, as stipulated by the International Labor Organization Convention. Per the convention, risk control begins by eliminating, controlling and minimizing the risk. If there is any level of risk remaining after this, risk control procedure indicates that you provide the necessary protective equipment and implement a program of action to monitor your employees’ exposure to the risk.
Having a sound risk control strategy is a vital part of any successful business’ management plans. Not only does a risk control system assist you in properly handling the risks and threats that could harm your business, it also helps you to identify and utilize the positive risks and opportunities that will help the company achieve its goals and strategic plans.
If you’re interested in more information about the services that we at Poms & Associates have to offer, or have any questions about risk control insurance, please contact us.
Gabriella Messina is an author who has written online content on a variety of subjects, including business insurance policies, optional coverages for specific businesses, and general insurance information and topics.