Businesses of all sizes should prioritize developing and implementing a risk management program to protect themselves, directors, officers, and subsidiaries. Last month, Newfront’s John McCall joined panelists Andrea Gildea of Wise and Brittany DeGan of RewardStyle in TechGC’s “Building and Maintaining an Internal Risk Assessment Program” virtual panel.

Key takeaways include:

• Identifying what a risk assessment program can look like.

• Best practices in building a program.

• Where to go for additional support and guidance.

The panelists discussed how risk assessment programs should identify where risk and uncertainty could impact business objectives and decide the best path to mitigate those risks, whether through insurance, employee training, or controls. It may involve multiple lines of defense including compliance committees should involve regular internal audits.

When it comes to assessing what risk is, and how much risk to anticipate, best practice is to appoint a constituent from each division of the business to identify all risks relevant to their area and score said risk based on probability and impact. From there, the mechanisms to mitigate those risks can be determined. The most effective programs come to fruition when all parts of the organization come together to bring different perspectives.

Involving third parties can be incredibly beneficial in establishing and maintaining a successful program. Your insurance broker should be able to assist in training legal or other teams in what they should be looking for in contract negotiations in regard to insurance requirements. They can also create a customized reference guide for legal teams outlining what should be looked for in a specific sector. Have outside counsel review your insurance policies. Outside counsel will tell you quickly about the quality of the coverage in place as they work with many clients with different insurance and therefore have further visibility into what is possible. Lastly, an outside insurance consultant will also help dig into proposed policies to ensure you’re not paying for something that sounds better than it really is or unnecessary components of a policy. The outside consultant can also act as a secondary advisor alongside the insurance broker, as well as help companies run an effective interview and selection process to find the right insurance broker for your company.

No organization can be risk-free but finding the right insurance broker and other outside service providers will allow a business to best balance its risk tolerance with the most effective policies, training, and best practices.