5 Ways You Can Reduce Your Company’s Risk

The risks faced by your company can often lead to lawsuits and bankruptcy of the business and owners. The severity of consequences will depend on the type of risk your company faces, but to minimize those consequences, you first need to reduce the risks themselves.

Identify Risks

To minimize your risks, you first have to identify what those are. Many of the risks you face will be unique to your industry and company, so it is a good idea first to assemble a team familiar with them. How can you know if your HR compliance checklist is accurate without someone from that department? The same goes for building maintenance, bookkeeping and sales, among other departments. You and your team can find resources and checklists online to help identify your risks and even find specific tips for reducing each.

Communicate With Your Team

Communication with the company is essential to ensure that you identify and address issues when they come up instead of when they become a problem, so be sure to have an open system for reporting suggestions and problems. It is also essential to ensure that each department knows cash flow and financial concerns that may affect how they operate and spend their budgets.

Work With Professionals

Build your insurance coverage with companies familiar with the risks unique to your industry, and consult legal experts for compliance issues. You will also want to hire reputable third parties for construction and maintenance.

Break Up Potential Risks

Whenever possible, break up big risk categories into minor potential risks that are easier to address independently. For example, listing cyber security as a potential risk addresses a large category and can seem more intimidating than listing passwords, network security, mobile devices and other factors unique to your company. Password security can be as easy as setting a policy and educating employees about it, while your network security may involve purchasing additional equipment or hiring an expert.

Have a Contingency Plan

Some risks, such as hazardous weather conditions or theft, will need to be included in a contingency plan now and addressed later. You can implement measures now to minimize the risk to your company and personnel, but the bulk of the work will need to happen as the event does. These contingency plans can include evacuation policies, employment termination clauses in hiring contracts, and disaster recovery company contact information. It is a good idea to consult your legal and insurance business partners to determine what scenarios need a contingency plan and to review the plans you make with your team.

Reducing the legal and financial risks to your company is not an easy task, but it will contribute to the business’s continued success. To do this effectively, you will want to assemble a team of department managers who can bring a list of risks they face and help you build a comprehensive list for the entire company. You will then want to break down those risks into manageable pieces and work on plans to reduce them effectively. You will also want to have contingency plans for emergencies as they arise.