Risk management involves much more than buying insurance. It is a disciplined approach to conserving your institution's assets. To protect your church institution:
Identify and measure your risks.
This is a two-fold process of:- Examining your business, from property holdings to operational processes, and identifying all risks that potentially threaten your organization's assets; and
- Estimating each risk's potential financial impact on your organization's asset base.
Safety inspections are an important place to begin, and we can help. The Federal Emergency Management Agency (FEMA)'s Project Impact helps identify risk for natural and other disasters. Many other resources are available in print and online.
Avoid and reduce risks.
Use operational planning and loss prevention and safety programs to help avert or mitigate risk.Retain risks that are both predictable and affordable.
It may be prudent for your organization to bear calculated risks, such as increasing the deductible on property insurance. These decisions should be based on such facts as the organization's claims history; its financial ability to fund claims below the deductible, and the premium savings that result from assuming more front-end risk.Transfer risk.
Use contracts to hold others, such as church-related schools, responsible for certain risks. Leases, facilities use agreements, purchase orders, and similar covenants are tools for transferring risk to other organizations or individuals.Monitor and adjust your risks.
Periodically re-examine your risk strategies and adjust them as necessary.
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