As your business grows, the risks you face become more complex, potential losses grow, along with your insurance premiums. At some point, you’ll need to decide whether it makes sense to turn over the responsibility for risk management to a full-time professional.
Before making this decision, experts recommend that you weigh two key factors:
1) the cost of paying a full-time risk manager, and
2) the potential savings that this manager can generate.
The first element is relatively easy to determine, it’s the salary and overhead of the manager, plus whatever clerical support that he or she needs.
The second item requires you to analyze the extent which a full-time risk manager can:
- Centralize and compartmentalize responsibility for risk management in a single department. This improvement in efficiency should more than offset the increase in administrative costs.
- reduce losses by providing analysis of loss control needs, careful scrutiny of reports, and knowledge of whom to contact for specialized help. Careful attention to loss reserves and adjusting practices can help cut costs dramatically. For example, adjusting liability and workers compensation claims requires special expertise. Insurance companies generally provide adjusters, it’s always helpful to have someone on your team who can evaluate their conclusions.
- help lower your premiums by paying closer attention to coverage criteria, negotiating with agents, brokers, and insurance companies, and using familiarity with industry terminology.
If you’d like our input on making this key decision, feel free to get in touch with the risk management professionals at our agency at any time. We’re here to serve you.