Any business owner will know the stress of finding the right insurance policy to protect their business.
After all, it’s difficult to diagnose the risks a company faces and anticipate what could go wrong.
On top of that, insurance can be hard to understand. This only adds to the challenge of analyzing what could go wrong while trying to get the most bang for your buck.
The reality is that insurance policies are often renewed year after year without making sure that coverages are appropriately matched with a company’s ever-changing risks.
These risks might be anything from a change in company revenue to a change in the number of employees, or changes in third-party vendors and industry regulations.
Even if there haven’t been significant operational changes, the insurance market sees turnover, with new carriers regularly entering the market, possibly offering better coverage or lower pricing.
The 2018 Small Business Risk Report found that as many as 43% of small business owners had not reviewed their insurance policies and coverage within the past year.
A lot can change within a year.
What Is a Risk Review?
A risk review is a thorough process performed by a risk manager to ensure that a business has met all of its insurance needs.
The risk review process is a detailed analysis of a business’s current insurance policies to determine
1) if the business has the right coverage, and
2) if the business faces unintentional gaps that will cause substantial exposure to risk now, or in the future.
This process helps business owners prioritize risks and identify cost-effective ways to manage that risk with traditional or alternative types of insurance products.
What’s Included in a Risk Review
Risk reviews include two major analytical categories: the commercial property and casualty (P&C) analysis, and the alternative opportunity analysis.
The commercial P&C analysis reviews current commercial property and casualty policies to accurately identify:
- Gaps in coverage
- Coverage exclusions
- Additional necessary coverage
- Opportunities to rearrange insurance packages for more comprehensive or lower-cost coverage
- More efficient insurance methods
The alternative opportunity analysis then determines what risk management tools are available to improve coverage while offering ideas that a business owner may not even be aware of.
Such tools may include alternatives to traditional insurance, like, captive insurance or self-insured medical plans with stop-loss coverage.
RMC provides complementary risk reviews to business owners and client’s of professional advisors. Request a free risk review here.
How the Risk Review Process Works
The risk review process begins with a deep dive into the business’s commercial insurance policies and health insurance plan, clearly outlining:
- Deductibles
- Endorsements
- Limitations and exclusions
- Property locations
- Risk classifications
It will also look at a company’s online and marketing presence—individual websites, Facebook pages, Yelp reviews, and any other internet presence—to paint a complete picture of the business risks from a risk manager’s point of view.
Many times, businesses advertise products and services online that are not covered under the existing insurance arrangement.
Following the outline will be a section offering recommendations for any gaps or emerging risks that are identified under each policy.
The overall length of a risk review depends upon the number of policies that are reviewed and the density of detail needed to accurately offer recommendations.
These reports typically take 1 to 3 weeks to complete and can range in length from 5 to 30 or more pages.
Final Thoughts
A risk review will help a business owner learn about the tools available to manage risk.
These reviews are ideal for business owners who worry about whether they have the coverage they need, and for the best value.
Since no one can accurately anticipate everything that might go wrong in a business, a third-party risk review is a great way to find potential problem areas that the business’s current insurance agent may have overlooked.
At RMC, our dedicated professionals bring deep industry knowledge, extensive experience, and a careful, unbiased perspective to every risk review.
For over 45 years, we have remained well-equipped to help you get the insurance you need, including business insurance, captive insurance, health stop-loss, retirement plans, life, and personal insurance.
To discover if your business is adequately protected, get in touch with us today and request a free risk review.
While risks can never be fully eliminated, a risk review will give you peace of mind in knowing your business is properly covered in the event of a catastrophic loss.
