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Risk Management For Contractors and Business Owners

What Is Risk Management?

Risk Management is the process of dealing with potential loss by a business or operation. The scope of Risk Management goes beyond purchasing an insurance policy as there are many areas of loss that may not be addressed by any specific insurance policy.

The phases of the Risk Management Process typically include:

• Identifying exposures (possible losses)
• Measuring those exposures
• Developing a plan to mitigate, transfer, or fund the potential losses (an insurance policy is a funding method)
• Implementing the plan
• Reviewing the effectiveness of the plan and making any necessary adjustments

This is a never ending analysis that must be adjusted constantly to meet the pace of a dynamic business and the environment in which the business operates.

As your insurance agent, we can be an integral part of your risk management team. Along with your tax advisor, attorney, safety coordinator, and executives, we can help you review all aspects of risk for your business and help you coordinate an integrated Risk Management Plan.

Most contractors and small business owners do this intuitively every day as they measure their risk-versus-reward for every activity, project, bid, and job that comes up. We can help you formalize this process which can be a key factor to allow for the growth of the business.

A Good Way to Start Risk Management

If you are not ready to do a formal plan that includes all the steps in the risk management process, phase in a plan by focusing on the largest categories of risk that most businesses face. We can divide your largest exposures to loss in the following categories:


Your business may own various types of property. How would a significant loss to your business property affect the future viability of your business?

• Buildings
• Personal property in your building or elsewhere
• Tools and equipment that may be at your premises, in transit, or at a job site
• Property in your care or custody that is owned by others
• Property in transit – Are you shipping goods to or from your premise? How are they shipped and who is responsible for that property?
• Loss of use of property – Both buildings and other property (In these days of supply flow concern this may be a much larger factor to your business operations than in the past.)

Human Loss

Your key employees may be the unique advantage that makes your company successful. Yet we spend very little time thinking about them as a critical piece of the business and protecting the business from the various losses that can happen to our “human assets”.

• Losing a Key Employee by sickness, death, retirement, or to the competition – Do we have a plan to help the company survive each of these possibilities?
• Business Perpetuation and Continuity – What happens to the business if one partner/owner gets sick, becomes disabled, or dies?
• Employee Care – Do you have an employee benefits plan that is valuable to the employee? What other employee retention program is in place?


What risk do you face from injuries to others?

• Bodily Injury – To employees, contractors, bystanders, or those who use your products or services. Can you mitigate this risk?
• Property Damage – What potential risk to property do your operations face? Don’t forget operations of automobiles, trucks, and equipment which may by your single largest exposure to a catastrophic liability loss.
• By Contract – Each day you may sign agreements under which you assume liability. Are you reviewing these agreements to make sure that loss is acceptable or at least covered by your insurance? (We can help you with this.)


Think beyond “environmental” to the full scope of the social and business environment in which you operate.

• Social Risk – Are you keeping pace with important changes in society that could increase your exposure to loss? This goes beyond “political correctness” and is a growing threat to all business owners.
• Regulatory Risk – Do you take part in industry associations to keep up to date on potential threats to your business or industry from regulations or laws that may threaten your ability to do business as currently made up? Are you current with all regulations and statutes?
• Competitive Risk – Are you paying attention to changes in society that could affect your business? What (or who) are the business disruptors in your industry?

G. S. Newborn & Associates Can Help

We have experience working with business owners in developing a Risk Management program. We can coordinate with your other advisors to do a full risk analysis for your company, or we can focus on whichever area of the process you feel will most positively affect your business.

For many of our clients, we perform the following services, which are steps in mitigating risk and part of a good Risk Management Program for any business:

Contract Review

We are always available to review a contract or agreement to give you an analysis of how the agreement fits with your insurance program. From a lease agreement to a proposal contract, we will let you know what liabilities you may assume under the agreement and how your insurance policy matches the insurance provisions and requirements of the agreement.

Subcontractor Agreements & Certificate of Insurance Program

If you use subcontractors, you should have an agreement where you transfer reasonable risk and liabilities to the subcontractor working on your behalf. You also must require them to have adequate insurance. We can help you develop these agreements & requirements and administer them to you so you know all subcontractors are meeting your requirements.

Employee Benefits Review

Having a meaningful employee benefits plan is not only critical in terms of expense, but it can be a centerpiece in your employee retention program as well. Not all plans are equal, and in your quest to manage expenses, you may cause increased employee turnover and dissatisfaction.

Let our experienced benefit advisor help you develop an employee benefits plan that maximizes your expenditures so you get the most bang for your buck from your employee benefits.


We can customize programs that are unique to your business or industry. We think outside of the box to find the best way to protect your business.

What Do These Services Cost?

We provide the above services to our clients with no additional charge. We think an informed client is a better client!

Can you afford not to have a Risk Management Plan? Let’s talk…

– Gary S. Newborn