Why Risk Management?

Why retain an Independent Risk Management Consultant?

Assess Your Risk Profile

Organizations must modify, improve and periodically, re-invent ourselves to prosper and survive. Often, these modifications change the organization’s “risk profile.” Sometimes when you are intimately involved in the process, it is difficult to identify and assess what risks are material and those which will have a minor impact on operations. An independent risk management consultant can help to determine whether your “risk profile” has changed and determine whether the current risk management program provides adequate and cost effective protection.

Evaluate Alternatives

The independent consultant will also examine all alternatives available to fund and manage risks. Insurance is just one of these. The risk management consultant can help determine which vehicle is best for you and assist with its design and implemenation.

Due Diligence

Frequently, an independent consultant is an effective part of a company’s due diligence team which evaluates potential acquisitions and divestitures. On more than one occasion, we have found that no accrual had been set aside to fund liabilities within a self-insurance retention or the amount that had been contributed was grossly inadequate. The amount required to properly fund the exposure, in one case, significantly reduced the amount paid by the buyer.

Design Insurance

Risk management consultants can also be helpful in the design and implementation of your insurance and risk management program. A consultant experienced in addressing the needs of a specific industry knows the protection which should be in place and how the program should be structured. An experienced consultant should also be able to determine the anticipated cost of the protection and determine those agents and brokers in your area who are qualified to handle the account.

Risk Management Plan

Often risk management functions lack a strategic plan. The function reacts to problems rather than anticipating needs as the organization moves forward. An effective consultant can assist with the design of the appropriate three to five year strategic plan and develop benchmarks which will allow management to evaluate the effectiveness of the function.