What's "Risk Management"?

Risk management is attempting to identify and then manage threats that could severely impact or bring down the organization. Generally, this involves reviewing operations of the organization, identifying potential threats to the organization and the likelihood of their occurrence, and then taking appropriate actions to address the most likely threats.

There was a post yesterday about having the hoseman tied off to the boom. As a business, you need to consider how an action might impact your well being or survival. How compliant can you be to requests from your customers? It is not really a ‘what is in it for me’ proposition as much as it is a ‘can my company survive the potential negative effects of this action’.

There will be fewer pumping companies one year from today than there are now. How much you charge for your work will be a deciding factor in who survives and who does not. How much you spend will be another factor. The 400 pound gorilla that many don’t even see is “How will you manage the risk” that your company faces every day.

You already have a paid ally to help you with not only managing your risk but more importantly to help you recognize what it is that constitutes that risk. This ally is your insurance agent and carrier. They understand risk; that is what they do. If you pay them, and you do, you need to bring them into your company to help you identify and manage your risk. If your insurance company cannot help you then you have the wrong insurance company. Finding out that you have the wrong insurance company AFTER you have an accident is usually the event that changes your company from a going concern to one that is in the ‘going out of business, business’.

While you have some time, call your agent and see what he/she has to say. It might be the best call you ever made.