The importance of risk management and insurance to businesses

August 13th, 2014 by admin

Risk management is likely a phrase you've heard in several different contexts. In insurance, risk "is the possibility of a loss or other adverse event that has the potential to interfere with an organization's ability to fulfill its mandate, and for which an insurance claim may be submitted," explains the Insurance Bureau of Canada.

Risk management tools could include something as simple as your insurer inspecting your home to obtaining commercial liability insurance to protect your business against possible suits from third parties.

Insurance represents one important risk-financing tool. Since most organizations don't have the required funds to completely cover a potential loss, insurance represents an affordable and effective solution to mitigating risk. 

There are many benefits to developing a risk management strategy, including saving your organization valuable economic resources and time, protecting its reputation, preventing legal liability, improving your preparedness, protecting the environment and reducing your utilities. 

In addition, risk management strategies are becoming increasingly critical. One reason for this is that people expect a very high level of service from companies and are seeking legal recourse more frequently when they feel wronged. In addition, organizations are liable for actions of their employees and volunteers, which could lead to third party suits. Finally, organizations are sometimes targets since they are regarded as having significant assets. 

For your business insurance needs and additional advice, contact the experts at Fundy Mutual. We take a preventative approach, seeking to identify possible risks before they happen. Our experienced team of agents can also help you with your auto and home insurance needs.