As your business grows, the risks you face become more complex, potential losses grow, along with your insurance premiums. At some point, you’ll need to decide whether it makes sense to turn over the responsibility for risk management to a full-time professional.
Before making this decision, experts recommend that you weigh two key factors: 1) the cost of paying a full-time risk manager, and 2) the potential savings that this manager can generate.
The first element is relatively easy to determine, it’s the salary and overhead of the manager, plus whatever clerical support that he or she needs.
The second item requires you to analyze the extent which a full-time risk manager can:
- Centralize and compartmentalize responsibility for risk management in a single department. This improvement in efficiency should more than offset the increase in administrative costs.
- reduce losses by providing analysis of loss control needs, careful scrutiny of reports, and knowledge of whom to contact for specialized help. Careful attention to loss reserves and adjusting practices can help cut costs dramatically. For example, adjusting liability and workers compensation claims requires special expertise. Insurance companies generally provide adjusters, it’s always helpful to have someone on your team who can evaluate their conclusions.
- help lower your premiums by paying closer attention to coverage criteria, negotiating with agents, brokers, and insurance companies, and using familiarity with industry terminology.
If you’d like our input on making this key decision, feel free to get in touch with the risk management professionals at our agency at any time. We’re here to serve you.
Every year, thousands of businesses come into existence in the US, and in 2011, entrepreneurs founded more than 7 million new businesses alone, but how do businesses guarantee their survival when general, business practices, management, and accounting begin to falter due to unethical or unknown missteps? The key to a successful business thriving beyond the misgivings of a single legal issue lies in a durable Management Liability Insurance Policy. Few outside of the business world have heard of this insurance, and many small-business owners may have never known this type of insurance exists. Let’s take a look a how Management Liability Insurance protects the multi-layered facets of a business and why it should be an absolute necessity in any business.
Management Does Make Mistakes
While it would be nice to assume that everyone in the workforce always makes the proper decisions, in reality, many managers make poor decisions that are capable of bringing ruin to any company. Choosing to select on service over another can result in a lawsuit against the business for poor landscaping or unethical business decisions by specific employees.
Employees and Unethical Decisions
In the previous years, millions watched as infamous characters–such as Bernie Madoff–made horrible decisions that devasted the lives of families, individuals, and organizations who chose to invest in a certain firm. It appears that the number of Ponzi Schemes only continues to grow, and this poses a risk to businesses. When a financial stakeholder, or investor, makes the decision to invest in a particular company, he gives the business an opportunity to tie his name to the said company, and in so doing, make the investor at-risk to the possible, unethical behavior of employees. However, purchasing Management Liability Insurance guarantees the company’s assets, which are effectively those of the investor, against any possible legal action resulting from the actions of employees.
Protect the Company Assets: Financial Stakeholders, Consumers, and Governing Agencies
The sole purpose of any business is to provide a product or service that results in expected, positive results for its investors, consumers, and any governing agencies. Management Liability Insurance protects the interests of a company in the event of unforeseen legal situations.