What is Risk?
Risk is the possibility of a loss or event that has the potential to interfere with an organization’s ability to fulfill its mandate. Injuries to volunteers or employees, abuse of a client, damage to property, and robbery are just a few examples.
How To Manage Your Organization’s Risk
Every activity your organization undertakes has inherent risks and liabilities. Risk management is a structured approach to help identify these risks and create and implement a plan to reduce or eliminate them.
The Role of Insurance in Managing Risk
It is almost impossible to eliminate all the potential risks connected to your organization’s operations. When risk is present, insurance is one of many tools that can help protect your organization.
However, buying insurance is only a small part of risk management. A risk management plan is comprehensive and includes other types of preventative steps to avoid risk. For example, a risk management plan may include a combination of internal policies and procedures, complemented by the appropriate insurance coverage.
Risk Management – A Tool to Assess Your Insurance Needs
Undertaking a risk management process helps you identify when insurance
can be used to protect your organization. Share the results of your risk
analysis with your broker or agent to determine the types and amounts of
coverage that are appropriate.
Risk management strategies for working with volunteers may include: risk assessment.
- formal policies and procedures,
- screening volunteers,
- clear job descriptions, or
- appropriate training.
Taking Stock: The Risk Management Process
The Insurance Bureau of Canada outlines the following risk management process:
| Identify what can go wrong | Look at every part of your operations and identify where you are exposed to potential losses. Ask yourself: What can go wrong? |
| Evaluate the risks. | Now that you have a list of what could happen, ask the following questions:
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| Examine the possible solutions. | Create a list of how you can help reduce or eliminate the risks you face. Your options may include the following: Avoiding the high-risk activity altogether. Using policies, procedures, or other tools to prevent the loss in the first place. Accepting the risk and its consequences for your organization. Finding ways you can reduce the impact on your organization if the loss happens. Transferring the risk to another party, for example, through insurance, or by contracting another organization to undertake the task. |
| Decide which option is the best fit for your organization. |
Look at the list of solutions and determine which is the best approach, both in terms of the cost and your organization’s ability to follow through with the implementation. |
| Implement the chosen option. |
Make a clear plan about how the option will be implemented, and how you will get support from your organization’s key stakeholders (the community, members, Board, volunteers, etc.). |
