Introduction

Business insurance enables most companies to manage a wide range of risks and their associated losses. The negotiation of insurance and desirable pricing is enhanced when the insurance carrier is familiar with the employer's risk management practices as they apply to common forms of business insurance such as workers compensation, property, general liability, products liability and auto to name a few.

When a company is growing quickly and/or impacted by the economy it is easy to fall into the practice of managing things day-to-day and merely complying with regulations as the modus operandi. Management should take the time to step back and evaluate operational programs, work practices, and company culture as they influence the awareness and control of risk. Economic and operational stress can challenge a company's ability to strategically plan and mitigate risk. A proactive risk management discipline can guide the company to better practices and more thoughtful decisions in spite of challenges posed by existing and emerging hazards. One critical element of an effective risk management program is risk assessment.

Companies that have implemented a risk assessment process should consider how that process and the resulting reduction of risk can influence their insurance carrier. Those companies that have not implemented a risk assessment process should consider the added benefit such practices can offer as part of a sound business case.

A review of the basic risk assessment process will assure understanding of the steps and terminology. This paper will address the benefits and why your insurance company is interested in your process. The last few pages contain examples of several different ways companies have demonstrated their risk assessment processes.

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