In mathematics risk is the probability of some event occurring or not. The value of the risk is the probability times the payoff or cost.
Managing risk is a bit of an art and involves three factors:
- Reduce the probability of the adverse event occurring. Perhaps storing the lawnmower gasoline beside the barbecue is weak. Maintaining the brakes on the car is a good idea. Eating more vegetables and less red meat is good.
- Reduce the amount of the loss should the adverse event occur. Sprinkler systems. Bicycle helmets. Routine maintenance.
- Pass all or some of the risk to an insurer.
All pretty simple, even obvious. But, how do you manage risk before you know it is there? Usually poorly.
Tim O’Brien is a casualty insurance broker on Long Island and we have corresponded off and on for quite a while. He has good ideas and I value seeing them. The most recent was a discussion and link to this article:
If you are a parent and you think you understand the many risks your child is exposed to while using the internet, think again.
Fueled by the increasing use of smartphones providing instant access to a variety of social media sites, our children are exposed to an ever increasing number of risks. Personal litigation for children bullying other children is on an upswing, as are cases involving students writing defamatory comments about teachers and each other. Parents are suing other parents and the school, and schools are suing parents.
After conducting a year-long research project on the subject, Kim Lucarelli, senior vice president and director of sales at insurance broker Oswald Companies, offers parents and risk advisors a number of important insights on this growing risk and how best to protect your children and your assets. To learn more about the risks and solutions to manage them, I encourage all parents to review this article available here: www.thinkadvisor.com
Should you wish to learn more about this topic, I would be happy to provide an introduction to Kim Lucarelli, CAPI, CIC.
You likely have some insurance in your home owners package that covers a thousand dollars or less of “voluntary damage”, usually a baseball carelessly tossed through a window, flowers destroyed or things like that. I will wager that few people have decided, on their own, to get liability coverage for the acts of children in their care.
While you are talking to your broker about children be sure the limits on automobile liability are high enough if you have drivers in your brood.
You cannot manage what you do not know about. Good managers are always seeking new opportunities and tools to avoid risk. Find advisors who inform you even when they are not trying to sell you something.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario. In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. email@example.com 866-285-7772