Total Cost of Risk is the sum of the costs arising from all of the risks faced by an organization. Risks can generally be categorized into one of the following three classes:
Operational- Operational Risk includes the cost of products, protection of property, insurance, damage to or destruction of supply sources for key raw materials, components, or services, injuries to employees or outside parties, damage to the property of outside parties including resulting consequential loss, damage to the environment, and employment decisions.
Financial- Financial Risk includes risks associated with commodity price variability or commodity availability, costs of capital and borrowing, customer credits, business development, profit and banking costs.
Strategic- Strategic Risk includes issues of risk that can have a major impact on the overall viability of an organization. These include issues centering on reputation of the organization or its employees, loyalty to the organization of customers or clients, development of new products or services, meeting the demand for existing products or services, and pricing of the organization’s products or services.
When you consider all your risks, it is important to understand how a well-designed insurance program can impact all these areas.
Change your Thinking About Insurance
Most businesses only look at their premiums when they evaluate insurance costs. We would like to provide an alternative view. For example, by only considering insurance premiums you are eliminating many other factors in your total insurance costs. Here are factors that make up your total cost of risk.
Robert Bell Insurance Brokers offers the business insurance products you need. Our professional agents will consult with you on the coverage and premiums that meet your specific needs. Feel free toget in touch or get a quote today.
© 2017 Robert Bell Insurance Brokers California License #0691053