Business Insurance: Manage your risk with a flow chart!

Flow charts are great little tools – they help you visually see processes. If you are like me, you sometimes need a little visual aid to conceptualize the problem (as fun as abstract problems are, nothing beats a good visual once in a while!) When you are determining an insurance policy for yourself, you have to be able to look at the Big Picture. A flow chart is a great way to look at your business process and see where the risks and opportunity for improvement lie.

Figuring out your insurance policy can be a very easy thing to do: Get some third party liability add some property coverage, charge a premium and VOILA! You have an insurance policy.

Determining your exposure to different risks however is a bit more complicated. Figuring out what incidents can cause which accidents varies from business to business.

For example: Most building owners have to worry about slip and fall accidents. Wet floors, loose carpets, clutters halls and poor grips on stairs are all examples of potential hazards that can lead to a lawsuit.

Contractors using scaffolding have to worry about objects dropping. Manufacturers have to worry about the staff member that inadvertently loads boxes near the electrical box.

Every business should have a set of procedures in place, outlining how it is run. This set of procedures is essentially a flow chart. Determining how your business runs, allows you to figure out where danger spots are (or potential danger spots) and do one of 2 things:

  1. Rectify it – change operating procedure to minimize that exposure
  2. Insure it – if the hazard is a necessary part of your business, then you can either self-insure it or insure it outside of your business (with an insurance company)

Working hand in hand with your broker, make sure you close as many loopholes as possible for you and your business. I have heard it said before: It only takes 20 minutes to pull apart something you have taken 20 years to build.

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