Minimizing potential liability and its associated costs is one of the main objectives of a risk management and insurance program.
Fortunately, some business risks are more easily reduced than others. For example, with respect to a business’s building and grounds, fireproofing and sprinkler systems should help reduce potential fire damage. However, other risks, such as vulnerability to lawsuits, may be more difficult to control.
Obviously, the cost involved to reduce any risk should be compared to the cost of the potential loss created by that risk. Your insurance provider can be a key player in this process, since some risk exposures are most cost-effectively covered by insurance.
By maintaining a strong working relationship with your provider, you will be able to take advantage of their experience, and they can help you develop strategies to address the issue of loss prevention. Loss control measures should be reflected in reduced claims. When payout costs for claims are reduced, those savings are very often reflected in lower insurance premiums. Your insurance professional can combine an intimate knowledge of your business with current trends in the insurance marketplace to help make your insurance program as cost-effective as possible. Be sure to contact a qualified insurance professional for further information.