The modern-day world of insurance is complex enough as to be confusing to the average, uninitiated layman or woman. Fortunately, however, said men and women are not always alone in navigating this mystifying area of business, as they often tend to enjoy the help of certified professionals in the area, namely commercial insurance brokers.
Indeed, far more than just an alternative to big, corporate insurance companies, these professionals assert themselves more and more as ‘travel companions’ to neophytes in the insurance business, not only seeking out the best policy option to suit their needs, but most importantly, holding their figurative hand throughout the insurance purchasing process and clarifying some of its most unfathomable aspects.
The team of commercial insurance brokers here at Watson-Laurie is no different. Far more than simply helping customers find the most adequate policy or plan for their needs, we pride ourselves on helping those who seek out our services understand the field we operate in a little better. It is not uncommon for us to field questions from clients regarding certain aspects of business insurance they are unsure about, and we are always more than happy to provide clarification, and ensure the process of buying a policy is as transparent as possible for our customers.
In that regard, one of the terms which come up most often in enquiries from our clients is ‘risk management.’ Many businessmen and women, particularly those running smaller or independent businesses, come across this term in their bids to insure and protect their business, but are not entirely sure what it means or how it is important to the insurance purchasing process. This is where specialist commercial insurance brokers come in – with their in-depth knowledge of the insurance field, professionals such as those that make up the Watson-Laurie team can elucidate their clients as to the meaning of this term, and its relevance to the process of buying commercial insurance as a whole.
It is for that exact purpose that the Watson-Laurie team have decided to put together a blog post expanding a little further on the topic of risk management, how it influences the process of protecting and insuring a business, and how commercial insurance brokers can help customers take the necessary precautions. In this manner, we hope to inform both our existing customers and those who may simply be browsing for a definition of ‘risk management’ and an explanation as to why it is important. We believe it is paramount that businesspeople looking to buy commercial insurance be as informed as possible, and we sincerely hope this article will fulfill that objective.
How can commercial insurance brokers help with risk management, then? The lines below might offer an answer!
What Is Risk Management?
Before detailing how commercial insurance brokers can assist customers with their risk management efforts, it is important to define the term, so that there are no doubts about what it refers to.
Risk management, as a concept, is by no means exclusive to business; rather, it takes place in every instance of human life. In short, this term refers to the process of identifying, assessing and dealing with potentially risky situations in the course of everyday life. From a business standpoint, this usually refer to situations resulting in loss of profit,
Risk management processes are usually carried out in three steps. First, the individual or company must understand the nature of the risk at hand, and the consequences it might have to their life of business; it is then necessary to come up with solutions to ensure the impact of said risk, should it occur, is minimal; lastly, the third step involves devising a structured plan of how best to implement these measures to ensure the risk is quickly and effectively minimised or neutralised.
The process of risk management for businesses does not deviate too much from this standard, although it does have one particularity when compared to the type carried out by the average human in their everyday life – namely, that it is left to professionals. Indeed, rather than undertake this process themselves, many businessmen hire commercial insurance brokers to do it for them, explaining how these types of professionals tie to this particular aspect of insurance. The lines below will go into more detail about the role commercial insurance brokers play in this process.
The Role of Commercial Insurance Brokers
As seen above, risk management can, in the context of business, be a complex process. This is why many businessmen leave its execution to trained professionals, usually expert commercial insurance brokers such as the ones employed by Watson-Laurie.
Upon being hired to carry out risk management for a company, commercial insurance brokers are usually expected to ensure their client – the company – keeps their risk-benefit ratio remains as consistently high as possible. To do so, these professionals generally follow a list of internationally recognised standards which, while constituting the template from which business risk management processes should be derived, is nonetheless flexible enough to allow for re-tweaking and re-tooling to fit each given situation. Certain companies, however, may prefer to outline their own method of risk assessment, in which case commercial insurance brokers are expected to comply with that client’s standards and follow their preferred way of carrying out the process.
Either way, however, the mission of commercial insurance brokers when carrying out risk management for businesses is the same: to take the three-step process detailed above and apply their expertise towards ensuring it is carried out appropriately, and clients are made aware of the risks they face and how best to go about solving them.
The lines above have attempted to offer some insight into what exactly is understood by risk management in the context of business insurance, and to how this process is generally carried out. In addition, an effort was made to explain how commercial insurance brokers can help with this process, and what their role in it entails.
We therefore sincerely hope this article was successful in its goal of informing readers and potential customers about this often doubt-inducing aspect of business insurance, as well as answering the question: how can commercial insurance brokers help with risk management?