Most business people would not bother with risk management if it did not have a direct implication on their profitability. This is normally the wrong way to look at things, as there are many benefits they can get for the concept.
The bit about insurance premiums is only part of the main reason. Businesses have to trim down their expenses, and premiums are one of them. Risk management may not attract an immediate reduction in the premiums, but it usually does in the long run.
But the main reason why they should feel motivated is the fact that risk management offers a way out when it comes to bearing certain risks. Insurance companies can opt to deny you coverage when they determine that you did not take all steps to prevent certain things from occurring. If you insist, you may get charged higher premiums. They ensure they have instructed you in some of their clauses to take reasonable precautions to prevent such risks. This shields them from paying those claims when they feel the business did not take the said precautions in the first place. If all the businesses covered all their risks themselves, the insurance industry would not exist. But still, there are instances when it is reasonable to expect a client to have made some effort to prevent certain occurrences from happening. This forms the basis of risk management efforts expected of a company.
There are some major reasons why a business needs to undertake risk management. It covers them when it comes to huge claims situations. There are claims that could cripple a business for a long time. It then minimizes the claims figures if they go through. The business can manage such small claims. It also does away with the minute but frequent claims that eat away at a business’ profits. It leads to savings for a business when the costs of operations are reduced. It also reduces the stress a business owner and their management team are likely to face. People generally relax when they are fully aware of what they are facing, and their options. There are also no reasons to throw about blame. When you do all you can about a certain risk, and it occurs anyway, you can rest assured knowing you did all you could. It will not be held against you, since your efforts are visible.
You therefore need to become aware of all the areas that your business shall do with risk management efforts. Integra Personell has been helping insurance companies recruit the best staff members for their important job positions. Ask them for the best places to start looking.