Risk Management

It is an implied term in every insurance contract that the policyholder should act as though they were not insured. In other words, each and every policyholder should take reasonable care to avoid claims.

That should be common sense, and after all, if you make too many claims your premiums will increase. However, what can you do to prevent claims?

This is where Risk Management comes into the equation. By taking steps to reduce the Risks that affect your business you reduce the chance of your having to make a claim, and this means that your premiums stay low.

It also means that you can spend your time developing your business rather than spending all day filling out insurance claim forms!

So what is Risk Management?

Essentially, Risk Management is:

So how should you identify the Risks that affect your business?

These Risks can be split down into a number of areas.

First, there is the Risk of damage to your property. Think about what could damage your property. Examples include faulty electrical apliances (which could cause fires), badly lagged pipes (which could freeze during cold spells and burst, causing a flood), and poor storage which could result in damage to the items stored.

Some of these Risks can be eliminated, for instance by replacing faulty eletrical appliances you eliminate the Risk of fires damaging your premises and it contents.

For Risks that cannot be eliminated, you need to consider how to reduce the probability of the Risk occuring, and take steps to reduce the impact if it does. An example here is storing goods that are susceptible to water damage above floor level to that in the event of a flood there is less chance of them being damaged.

Once you have identified and dealt with the Risks that could result in damage to your property, you should consider the Risk of theft. "Do you have decent physical security (e.g. locks) and a burglar alarm?" is the obvious question, but also consider things such as how close your till is to the main entrance, and what system you use to bank the takings at the end of the day.

But employees can steal from you as well. Do you allow one person to count the takings at the end of each day, or do two people need to be present? Are all staff allowed access to the till, or only staff who have been employed by you for a particular length of time?

So far we have discussed the Risks to your own property, but what about that of your customers? If you run a gym, do you provide somewhere secure for them to store their valuables while they are working out? Do you have adequate disclaimers for communal storage areas?

And finally, there is the Risk of injury to customers. The first thing to do here is identify obvious hazards such as slippery floor surfaces (especially in places where water is present), uneven floor surfaces, trailing electrical cables and so on, all of which present a tripping/slipping hazard.

Next, consider how you would evacuate the premises in the event of a fire. Do all of your staff know what to do and where to assemble? Your staff are going to panic as much as your customers in the event of a major fire, and so it is vital they know what to do before the event to minimise the chance of injury if the unthinkable happened.

But customers can also be injured as a result of the services you provide. Is adequate training given before they use your equipment? Is the equipment checked for defects on a regular basis and is a record made of those checks? Are your staff fully trained in the services they provide, and is that training documented?

Of course, because the different types of business in the Health & Beauty sector are so diverse, it is impossible to provide a comprehensive list of things to check here, but we hope that this has given you some food for thought.

If you would like to find out more about this topic, a great deal of information (much of it free) can be obtained from the Health & Safety Executive. They can be contacted at:

HSE Books
Tel : 01787 881165
Fax : 01787 313995
PO Box 1999,
Sudbury,
Suffolk,
CO10 6FS

In addition, Park Insurance Services would be happy to discuss either general or specific Risk Management issues with you.