Why is risk management important?
A deliberate and disciplined risk management and insurance purchasing process protects an organization and its people
from financial loss and, when using insurance, transfers some of the major risks faced to a third party. This provides
protection and peace of mind, because payment or indemnification will be received in the event of covered losses. A
business is able to “trade” uncertain exposures such as the risk of loss, for greater predict…ability and financial protection.
Good risk management practices, along with strong employee and executive benefit programs, also attract and retain
capable people. In addition, risk management helps a business owner plan for and finance business perpetuation needs
and strategies. In some instances, such as workers’ compensation insurance, coverage is required to comply with state
and / or federal laws.