Managing risks through a combination of solid processes and procedures is necessary for the success of any business.
Recently, I made the change from providing Human Resource consulting services to providing insurance solutions to clients. Going through the switch from being a consumer of commercial insurance products to a provider of those same products has revealed many interesting insights.
Human Resource and consulting departments often manage risks through the creation and implementation of effective procedures and training.
An example of this is when an HR department creates solid hiring practices, provides non-harassment/non-discrimination training to managers and utilizes a complete and up to date employee handbook. These best practices help to mitigate the exposures of wrongful termination, harassment and discrimination.
However, rigorous hiring, training and management practices can reduce but not eliminate many of the inherent liabilities of a business. Optional insurance products can be helpful for businesses looking to minimize risk in these areas.
In conjunction with preventative actions such as non-harassment/non-discrimination guidelines for staff members, Employment Practices Liability (EPL) insurance can create a more complete risk management solution.
Insurance companies will require that certain HR procedures and business practices are in place prior to providing a company with a policy. For example, without the above mentioned best practices, insurance companies may decline to place an EPL policy with that company.
It is clear that a holistic approach to risk management is the best solution for business. Having recently made the change from business consultant to insurance consultant there are a number of similarities:
– The need to listen and understand a client's current knowledge and perceptions of the subject.
– The importance of creating an open dialogue and understanding the business goals of the client.
– Integrity and trust must be established and maintained for an effective relationship.
– Business owners want to protect what they have built and see value in a consultative approach to achieving that.
– Price is always an issue – but there is always something more important.
Everyone knows that insurance covers people and property, however, direct and indirect coverage can sometimes be hard to understand. One of the roles of an agent is to determine how much education is needed or wanted and provide the correct amount of information.
Insurance agents have an opportunity to be a great resource to determine the level of risk that is comfortable for each customer and to build a solution which matches that specific tolerance.
A knowledgeable insurance agent should be a key part of any business' team of trusted advisors.
Tony Johnson is a licensed insurance professional for Davidson Insurance in Vancouver. He can be reached at 360-514-9550 or Tony@Davidsoninsurance.com.
