IDENTIFYING AND MANAGING YOUR RISKS

Risk management basics

Everyone has a different level of risk and before you can start to manage your risks you need to identify them. For example, you may live in an area where theft is common, or you can live in an area that is prone to flooding.

Before buying insurance, it is important to identify risks and determine how you can reduce the possibility of them occurring. You are then able to put protective measures to reduce the possibility of the risk occurring. For example you may install security cameras, floodlights and an alarm system in your house to keep off thieves. Insurance will then come in as a way to reduce the impact, especially financially, if the event does occur.

Insurance is an important component of risk management.

It is a condition in most insurance policies that the policyholder to take all reasonable precautions to manage any risk to their property, and that they have declared any potential risks to the insurer at the time they are applying to take out an insurance policy.

Risk and premium

The general principle is, the higher the risk, the higher the premium.

By paying an excess, you are accepting the management of a small part of risk and thus you will pay a lower premium. You may also choose not to pay excess, this will translate to a larger premium since the full coast of the risk has been transferred to the insurer.

Risky behavior

Indulging in risky behavior may be excluded from some forms of insurance. For example, most medical insurance may not accept claims from sky diving injuries. Motor insurance are unlikely to pay your claim if the driver of the vehicle was involved in an accident while driving under influence of alcohol.

TYPES OF RISKS

1. Fire and perils insurance

Fire can happen anywhere and anytime. The effects can be devastating to families and businesses. You can protect yourself from total loss through insurance.

2. Political violence

Our political environment can be unpredictable. It is better to be safe than sorry. Protect yourself from total loss through insurance.

3. Business interruption insurance

Large and small businesses make up a big percentage of our economic activity. Anything can happen to your business. Protect your business by getting an insurance cover for business.

4. Law suits

You and your business can be sued for any number of reasons. You can insure yourself and your business against some law suits.

5. Terrorism attacks

We live in dangerous times. And the whole world is not safe because the world is vulnerable to terror attacks. Protect yourself, assets and your business from total through insurance.

6. Burglary or theft insurance

Theft is a reality, insure your assets for case of replacement.

7. Personal accident and group accident

Accidents happen, anytime, anywhere and the effects can be devastating. Protect yourself from total loss through insurance.

8. Death

This is a topic most people don’t like to consider. Insurance has products that ensure your dependents do not suffer after you are gone.

9. Illness

Sickness can strike at any time. Long term illness like chronic diseases can cause serious financial strains to families. Safeguard your family through medi