Three ways the Risk Management Process Saves you Money

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When you first talk to Deland, Gibson, you might find that we don’t mention insurance very often. Most insurance agents operate as risk management professionals who look at insurance as a last resort option only. This often takes business owners by surprise. You want someone to save you money on your insurance premiums, so why are we asking about safety procedures on your production line?

It’s important to remember that the risk management process is the first step in saving money on your insurance premiums. And it can save money elsewhere too.

Less Risk Means Fewer Claims

The most obvious savings a good risk management process creates are prevention. Take workers compensation as an example. No business owner wants to see their employees injured at work, but it does happen. When an employee is injured at work, it means you need to pay compensation and could mean higher premiums. Effective risk management reduces the likelihood of injury, which means fewer claims.

Risk Reducing Processes Lead to Greater Productivity

When insurance agents start to ask about production processes and financial targets, some business owners start to get nervous. The question is always, what does this have to do with insurance? Your insurance agent asks about these things, so they can identify risks and find ways to reduce or prevent them. This risk reduction affects insurance premiums, but it could also affect your productivity. Safer procedures usually mean more efficient processes, which ultimately means a healthier business.

Reduced Risk Usually Means Cheaper Premiums

Of course the real savings generated by the risk management process are in insurance premiums. Every insurance premium is calculated based on exposure. The more likely the risk is to occur, the more you pay. Effective risk management can reduce your exposure across a number of coverage’s, which means cheaper premiums. In some cases, your risk management processes could replace insurance entirely. Although in most cases, some insurance will be required.

It can be surprising when you have a meeting with your insurance agent, and nobody talks about insurance. However, because your agent is focused on the risk management process, they don’t have to talk about insurance to save you money.

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