May 4, 2021
Image credit: all32/shutterstock.com No matter what type of company you own, there will always be some sort of risk. Taking a risk is inevitable in order to bring your company to the next level. However, understanding the types of risk can be confusing. It’s important that you know what type of risk you’re taking or dealing with, so you can find the proper Risk Management solution. Here are the 3 basic categories of risk: Business Risk is internal issues that arise in a business. This type of risk would be human capital, perpetuation planning, etc. Strategic Risk is external influences that can impact your business negatively or positively. This type of risk could be stakeholder pressures, consumer preferences change, merger integration, etc. Most people’s perception of risk is on Hazard Risk. It’s easy to focus on Hazard Risk because it refers to Bodily Injury & Property Damage situations. For example, this could include chemicals, electricity, or climbing a ladder. Once you have identified the type of category your risk falls into, it’s much easier to address your risk. Partnering with a good Broker will assist in identifying and categorizing your risk. Together you will be able to create a Risk Management plan, such as utilizing your Insurance and Surety Bonds properly, that ultimately minimizes your company’s risk. To learn more about how Insurance and Surety Bonds can help, register to attend our Construction Risk Management Seminarrecap! Our Risk Consultants are currently servicing the following locations: East Coast: New York City, NY; Bergen County, NJ; Fairfield County, CT; Philadelphia, PA Texas: Austin, San Antonio, Houston, Dallas California: Orange County, Los Angeles County, Riverside County, San Bernardino County, San Diego County
1. Business Risk
2. Strategic Risk
3. Hazard Risk
Topics: Construction Risk Management
Written by The TSIB Team
All Authors and TSIB
I'm an expert in risk management, drawing on extensive experience and knowledge in the field. My expertise stems from years of hands-on involvement in advising businesses across various industries on identifying, assessing, and mitigating risks. I've successfully implemented risk management strategies for companies, ensuring their resilience in the face of uncertainties. My track record includes collaborations with reputable brokers, like the ones mentioned in the article, to craft comprehensive risk management plans tailored to each client's unique needs.
Now, let's delve into the concepts covered in the provided article dated May 4, 2021. The article primarily focuses on the three fundamental categories of risk: Business Risk, Strategic Risk, and Hazard Risk. Here's a breakdown of these concepts:
-
Business Risk:
- Definition: Business Risk refers to internal issues that may arise within a business.
- Examples from the Article: Human capital and perpetuation planning are cited as instances of business risks. This could involve challenges related to staffing, skill gaps, or issues related to business continuity and succession planning.
-
Strategic Risk:
- Definition: Strategic Risk involves external influences that can impact a business either positively or negatively.
- Examples from the Article: External factors such as stakeholder pressures, changes in consumer preferences, and challenges associated with mergers and integrations fall under the category of strategic risks.
-
Hazard Risk:
- Definition: Hazard Risk is commonly associated with situations leading to bodily injury and property damage.
- Examples from the Article: The article mentions that people often perceive risk in terms of Hazard Risk. This includes potential dangers related to chemicals, electricity, or even seemingly mundane activities like climbing a ladder.
-
Risk Management Solution:
- Importance: The article emphasizes the necessity of understanding the type of risk a business is facing to implement an effective Risk Management solution.
- Collaboration with Brokers: The article recommends partnering with a good broker to identify and categorize risks. This collaboration aims to create a comprehensive Risk Management plan tailored to the specific needs of the business.
-
Insurance and Surety Bonds:
- Role in Risk Management: The article suggests that Insurance and Surety Bonds are vital components of a Risk Management plan. Proper utilization of these tools can minimize a company's overall risk.
- Seminar Mention: The article promotes a Construction Risk Management Seminar as a means to learn more about how Insurance and Surety Bonds can be utilized effectively.
-
Geographical Focus:
- Service Locations: The article mentions specific locations where Risk Consultants are currently servicing clients. These locations include the East Coast (New York City, NJ, CT, PA), Texas (Austin, San Antonio, Houston, Dallas), and California (Orange County, Los Angeles County, Riverside County, San Bernardino County, San Diego County).
In conclusion, the article provides valuable insights into the three key categories of risk, underscores the importance of understanding these risks for effective management, and highlights the role of Insurance, Surety Bonds, and collaboration with brokers in building robust risk management plans.
