Managing your risks as a professional is important for a few reasons and it’s something all professionals should be doing. Of course, risk management looks different for every individual, profession and industry, but a few basics apply across the board. Here are our tips for basic risk management for any professional:
- Identify risks and solutions as a team
- Documentation is key
- Develop a basic emergency response plan
- Keep an eye on technology and data
- Protect yourself with the right insurance
We’ll also break down the very basics of risk management so you can start protecting your business and livelihood.
What is risk management?
Risk management is evaluating risks that could impact your business’ operation or profitability as well as taking action to minimize the impact or avoid these risks. In step form, this means:
- Identifying a risk.
- Determining the impact of a risk to your business.
- Finding the cause or source of the risk.
- Develop processes to prevent or minimize the risk.
- Develop a plan to recover from the risk.
Obviously, you can’t plan for or prevent every risk. Focus on the ones most critical to your business.
What are the benefits of risk management?
The benefits of risk management include:
- Keeping long-term costs low
- Keeping your business operating smoothly
- Project completion and success
- Aids contract or project negotiations
- Improves communication
- Helps your business adapt to issues and change
Of course, there can be many more benefits, depending on your company’s individual risks and how effectively you manage them.
Identify Risks and Solutions as a Team
Working with your team will help identify a wider range of risks and solutions to prevent or mitigate them. It also keeps everyone aware and involved, which furthers risk mitigation. If you’re the owner-operator or the only employee, that doesn’t mean you’re at a disadvantage. Network with professionals in your industry or seek out risk management professionals.
Documentation is Key
Developing processes for proper documentation is key for risk management. Why? It provides a paper trail – proof of what your company has done in the past. It’s critical evidence if you’re ever involved in a lawsuit and keeps you on task and organized. Here’s what you should document:
- All internal processes and workflows
- All communications with clients, vendors, and employees
- All financial documents
- All reports
- All proposals and business plans (including risk management)
- All documentation you may provide to clients (blank copies)
- All contracts
Your individual profession, industry or government may require additional documentation. Ensure your documentation is backed up and protected.
Develop a Basic Emergency Response Plan
It can be overwhelming to start planning for all these risks and figuring out how to mitigate them. Your first step should be a simple emergency response plan. Common scenarios that can affect any business include:
- Natural disaster
- Fire
- Medical emergency
- Cyberattack or data breach
This is a basic, overall plan that will apply to most emergency scenarios with some tweaks. This guide from the Department of Public Safety and Emergency Preparedness will help.
Keep an Eye on Technology and Data
This is important for two reasons:
- Data can help inform you on your most critical risks and help you mitigate or prevent them.
- Technology and data can be risks themselves.
Cyberattacks are an ever-increasing problem for Canadian businesses. It’s important to be aware about these cyber risks and to do what you can to mitigate them.
Protect Yourself with the Right Insurance
Having the right insurance can help you recover for risks you can’t mitigate against.
Get an online professional liability insurance quote within minutes or talk to one of our brokers today to learn how to protect your business.