Lorne Wiebe is a well known former Cornwall broadcaster. Even though he now calls Ottawa his home, he has a special affinity for Cornwall and SD and G. He now works at Rhodes & Williams Insurance Ltd. and partners with the local business community to help them deal with their day to day risks. If you have questions or wish to contact Lorne, you can email him at firstname.lastname@example.org
Insurance is Just a Part of it
When it comes to protecting your business from the hundreds of risks it faces everyday, you might expect an insurance broker (guilty as charged) to offer a one-word solutio - insurance. But that isn’t the case - or at least it shouldn’t be. Your insurance broker needs to point out a whole list of other options for you whenever the discussion revolves around protecting your company.
Ottawa - June 25, 2012 - When it comes to protecting your business from the hundreds of risks it faces everyday, you might expect an insurance broker (guilty as charged) to offer a one-word solution…insurance. But that isn’t the case – or at least it shouldn’t be. Your insurance broker needs to point out a whole list of other options for you whenever the discussion revolves around protecting your company.
We use a handy little chart at Rhodes & Williams Ltd. which spells out all of your potential protection options, including risk avoidance, risk mitigation, risk transfer and even risk acceptance. I won’t dig deep into all of these risk management options because each of them is a discussion as long as your arm and not all of them apply to every business situation but knowing just a few of them might make you think about your operation a bit differently.
You might believe that the first strategy, “risk avoidance” is simply not possible and that your business will always face the risks it faces. But let’s suppose that a small part of your operation includes wood cutting and every time one of your employees hauls out the saw, you get nervous. You know that you need those few pieces of wood every month so how do you avoid the risk? Well, how about paying the lumber yard up the road to saw the boards for you at their premises? Almost every lumber yard provides that type of service. It might mean a little extra cost on the one hand, but wouldn’t that be worth eliminating the risk of one of your employees getting hurt, not to mention your improved piece of mind? It might be something to investigate.
Another way of dealing with risk is to lessen the effect that a disaster might have on your company. That’s “risk mitigation”. You can do that by instituting closely monitored safety programs and procedures along with disaster response and recovery plans. Getting back into a profitable position quickly after a major loss can be the difference between staying in business or going broke.
Of course, you can transfer risk onto insurance products but you can also transfer some risks onto other people or companies by way of “hold harmless” clauses in contracts – clauses that state you won’t be held responsible for certain kinds of loss.
And sometimes it makes more sense to just accept the risk and create either a reserve fund or adjust your cash flow in order to respond to a specific issue.
Much of this depends on how large your company is and also the risks that it faces but if all you are hearing from your broker is that you “need more insurance” perhaps it’s time to find a different broker – one that helps you look at both your business and the risks it faces in a new light.
Presented here is a general article about insurance. The discussion is general in nature, and does not constitute insurance advice. This is not intended to be a description of coverage, and does not include details of the coverage nor the terms, conditions, qualifications, limitations and exclusions applicable. Policies should be reviewed in their entirety and related to your specific operations. Many insurers permit changes (Changes to insurance policies are usually called "endorsements" or "riders") in their limitations or exclusions to match your specific requirements. As insurance advice must be tailored to the specific circumstances of each situation, nothing provided herein should be used as a substitute for the advice of a competent insurance broker. IN NO EVENT WILL RHODES & WILLIAMS LIMITED BE LIABLE FOR ANY DAMAGES WHATSOEVER, INCLUDING SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, ARISING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THE INFORMATION PRESENTED IN THIS DOCUMENT.
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