What You Should Know About Risk Transfer
As a business owner, you will know that a great deal of your time is evaluating risk: whether or not to land that big deal, which employees to hire, and how to safely conduct your business. Every business, no matter the industry, size or location, has risks. Once you asses those risks, you can begin taking steps to reduce them. One action a business might come across is risk transfer.
What is risk transfer?
Risk transfer is simply a business taking whatever risk it may potentially face, for example, a loss of profits caused by equipment failure, and trying to transfer that risk to someone else. The most common options are first-party and third-party insurance. When effective, risk transfer allocates risk equitably, placing responsibility for risk on designated parties consistent with their ability to control and insure against that risk.
Keep in mind that shifting the risk and responsibility doesn't necessarily shift the liability. When the new landscaping crew improperly install a sprinkler head which then causes damage to your property, you can hold the landscaping firm liable. However, if a guest slips and falls by the front office and injures himself, he will hold you liable for negligence. Know what your potential liabilities are and make sure you're covered.
To decide if your business should implement risk transfer, first look at what your risks are. Different businesses have distinctive risks at all levels. Look at the possible ways your business can be impacted by issues in and out of your control.
Talk to your insurance agent for more information on risk transfers and how they can potentially assist your business.
To secure reliable
business insurance,
contact the experts at Little & Sons Insurance Services. Serving Banning and the surrounding cities in California, we are ready to assist you with all your policy needs.
