If you’re a business owner or just human, liability exposure is an issue. From having someone over for a barbeque to starting a dynamite manufacturing company, everything we do has some risk. How can we prevent that risk from ‘coming in like a wrecking ball’ and causing panic at the disco?’ Here are my top ways to reduce your liability exposure, and prevent a major loss:
Don’t be a moral hazard
Moral hazards are people who see a potential risk but are either too lazy to deal with it or think, “eh, I have insurance, that’s what it’s there for, I’ll let my policy take care of what happens.” This is inviting liability in. Have you ever seen those shows about people who keep lions or some other exotic animals as pets? We all know what is going to happen at the end of the show – the person is going to get eaten. Seeing a problem and being too lazy to correct it is like starting to see your pet lion drool over you, and not do anything about it – liability is coming!
Don’t be too stubborn to change
Gracy Hopper said one of my favorite quotes, “The most dangerous phrase in the language is, ‘We’ve always done it this way.'” Especially in today’s world, not updating protection, policy, or procedure is a good way to increase your liability exposure. If you’re a fan of ‘Parks and Recreation,’ you may remember the episode where Ron Swanson had to bring his workshop up to code. One of my favorite violations was keeping oil-soaked rags by his fire. I can imagine him saying, “I’ve always kept those there! Besides, where else would I put them?” This is a small, silly example, but being willing to change and update is crucial to minimize your liability exposure.
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Don’t rely on your own ideas
Many people think that their ideas and analysis of risk is the absolute best and that they know how to avoid risk. Answer one question though – when was the last time you had sunglasses on your head and thought, “where are my sunglasses?” General Patton coined another one of my favorite quotes, “If everyone in the room is thinking the same thing then no one is thinking.” If you’re the only one coming up with ideas on how to avoid risk or looking for problematic areas, you’re in trouble. Bring other people in to help you strategize, and look for problems.
Perform a SWOT analysis
Everyone company should be performing a SWOT analysis every year. This stands for Strengths, Weaknesses, Opportunities, and Threats. Take time to review these areas, and plan on improving your weaknesses and how you can overcome certain threats.
Call me at Capitol Insurance to help with your risk management, because after all, it’s in our name!