The discipline of risk management is dedicated to understanding and managing the risks small businesses face. These include data breaches, fires, and more common injuries like slip-and fall injuries.
Risk management plan involves many activities including assessment, protective measures, and small-business insurance. All of these activities are intended to help small businesses succeed and survive.
What’s a risk?
What is risk? The business may have to close if the risks are too severe. Most risks fall under one of two categories: pure risk or speculative risk. These are events that a company cannot control. Pure risks include vandalism, fires, and the deaths of key employees. These are the negative or positive outcomes of management decisions. Examples of speculative risks include expanding a business to a new area or launching a product. When small-business owners and their insurers discuss risk management they usually refer to pure risks. Business owners and leaders are more concerned about speculative risks.
What’s the risk management process?
Business risk management refers to a systematic approach to understanding and managing risks. This is more than just small-business insurance. It includes:
Identifying your Risks: Data loss of customer, financial and sensitive business information. You need to identify all the risks your business faces.
Developing risk mitigation plans: Define steps to reduce the likelihood of a risk becoming a damaging incident.
add – SpartanTec, Inc. in Columbia SC can assist with a thorough analysis of your vunerability and help you develop a risk management plan. Define steps that will reduce the chance of an incident causing damage. Buying insurance is crucial for small-business owners. Insurance can help reduce the financial impact of losses. There are many insurance options available. General liability, business owner’s insurance, commercial property insurance, errors and omissions insurance, and directors and officer insurance are all common forms of small-business insurance. Maintaining your risk management plan. It’s important that you review it at least every six months to ensure it is still relevant.
What’s the difference between business continuity planning and risk management?
Business Risk Management is a broad-based discipline that analyzes and mitigates threats before they cause disruption. Business continuity planning helps businesses get back online after major incidents (natural disasters, data breaches, etc.). It can disrupt operations. Although both disciplines use the same tools and techniques they have different scopes and times.