Risk Management

What types of risk might you face?

Risk can broadly be categorised as either strategic (or business risks) or operational risk.

Strategic risk includes areas such as personnel, financial, technological, managerial, political, environmental, competitor, social, contractual or legal.

Operational risk is more often associated with physical loss or damage such as fire or personal injury.

Download Zurich Municipal’s guides on three types of risk:

Casualty Risk Practice Overview

Property Risk Practice Overview

Strategic Risk Practice Overview

What are the benefits of managing risk?

By making risk management an essential part of the way your organisation operates you can firstly identify and then prioritise your risks, taking practical steps to manage these.

There is much press comment on society becoming increasingly more litigious and as a result it is even more important to show that good risk management procedures and systems are in place.

The protection of people from death and injury and the protection of an organisation’s assets are of paramount importance and risk management is central to this.

Risk management is a now a well established requirement of good corporate governance and therefore features heavily in audit inspections and assessments.

The cost of losses is usually only the tip of the iceberg. The Health and Safety Executive estimate that for each £1 of insured risk, there is between £8 and £32 in uninsured loss such as management time, administrative costs, damage to reputation, hospital expenses and the like.

In short, loss prevention and business improvement are different sides of the same risk management coin. Prevention is always better than cure!

Tips for good risk management

• Be proactive – identify all the risks to which your organisation is exposed and that might prevent you achieving your goals
  
  
• Prioritise risk to ensure you take action on the most important based on a combination of their likelihood of occurring or the cost if they do occur
  
  
• Assess the costs your organisation would have to pay, which aren’t covered by insurance, for handling an incident. Then try to predict how could these could affect your organisation’s budgets
  
  
• Take into account the potential benefits of risk management. It gives you opportunities to look closely at what your organisation does and provides solid foundations for making improvements that will help do things more efficiently, effectively and/or safely than before