Planning, Knowledge Can Improve Business Risk Management

July 19, 2014

Few things are as important as how a business responds to a crisis. With an effective risk management plan in place, it will be easier for a company to minimize the financial impact, reduce the likelihood of insurance claims and better protect employees. Without such a strategy, smaller issues can add up quickly.

Therefore, businesses across the country should make sure that their risk mitigation methods are in order before problems appear. Recently, a number of risk managers and similar professionals gathered at the Public Risk Managers Association meeting in California, Business Insurance reported. At the annual conference, topics of discussion included experience and planning, especially how those two elements factored into effective risk management.

Trained staff can mitigate risk
One of the main themes present at the meeting was the idea of expertise, according to Business Insurance. Bringing the right people into a company will have the benefit of improved risk management.

For example, David Paulison, former head of the Federal Emergency Management Agency, spoke about how he discovered a lack of skilled staff members at the organization when he took over following Hurricane Katrina.

“When I took over FEMA, FEMA was being run by people whose sole qualification was that they worked on the campaign,” Paulison said at the conference, the media outlet reported. “These people had no qualifications to run an organization like that.”

Instead, he quickly brought in an experienced risk management team. All employers should want to hire and train workers to be skilled in emergency management, so everyone will know what to do when problems do arise.

Be ready for anything
While no company wants to face a serious problem, having a strategy in place to cope with anything can reduce the financial impact and ensure that all employees remain as safe as possible.

According to the U.S. Small Business Administration, this can be achieved by developing a disaster preparedness plan. With this in place, companies will have an easier time staying operational during a catastrophe and reducing the associated costs.

Moreover, this can be achieved by creating backup plans in case serious actions need to be taken. Ideally, any firm will have a solution to remain open from another site. In the event of severe weather, fire, or other similar problem, a risk management plan can provide this secondary location to conduct business. It should also cover what employees’ first actions should be, including how to evacuate the building.

With these steps covered, employers can know that their businesses and staff members are ready to handle any situation.