S&L Business Breakdown is a four-part weekly series featuring candid Q&A’s with the business attorneys of Stock and Leader on the life of a business from formation to expansion and everything in between.
Form your business entity…..check.
Hire your workforce…check.
Next step in your business plan…developing a risk management plan.
That’s where Business Attorney Neil Slenker comes in. He’s a pro at helping business owners to identify and fix potential risks to their organizations BEFORE they happen, so that when problems strike, you know just what to do.
What is a risk management plan and why do business owners need one?
A risk management plan is a plan developed and periodically reviewed by the business which identifies and assesses the many risks confronting the business and implements steps and strategies to either avoid or mitigate that risk. The goal of the plan is to minimize the disruption to business operations and the loss of profitability which often occur when unforeseen events arise.
What could happen without a risk management plan?
If a business owner doesn’t take the time to identify, evaluate and address the various risks to which their company is or could be exposed, they are wasting a valuable opportunity to avoid, or at least mitigate, the negative impact of the many unexpected problems, crisis and liabilities that can strike a business.
What types of issues does a risk management plan help to address?
The issues vary by the nature of the business, but can include employee liability, environmental liability, premises liability, contractual liability and many others. The corresponding approach for addressing the risk of liability also varies, and may include everything from the development of strategies for liability avoidance to the securing of appropriate insurance coverage.
How often do business owners need to update a risk management plan?
Risk Management Plans should be reviewed at least on an annual basis. Changes may not need to be made every year, but it is important to get in the habit of conducting a review annually. Think of it like an annual physical. Hopefully everything is in good shape, but if a problem is identified, it is always best to address it as soon as possible.
Missed the last installment? Read it here.