Risks Every Business Should Review

Take a holistic approach to the risks that are unique to your business. In this episode of Risky Business, Colin Rooke discusses creating a risk assessment plan and reviewing areas of your business for possible dangers.

Listen to the full episode here, or read the full transcript below

Paul Martin: Welcome to Risky Business, commercial insurance with Butler Byers. This is Paul Martin, business commentator. You’ve heard me talking about the Butler Byers risk assessment system, and we continue that conversation, as always, with Colin Rooke, the commercial risk reduction specialist with Butler Byers commercial insurance. Colin, in our last episode, we talked a little bit about getting kind of behind the wall on your step-by-step risk assessment system. We started to look at, what are some of the steps? What topics do you cover? And we addressed issues, I think probably, like cyber crime, cyber breaches. This is something that’s obviously catching a lot of headlines today. We also talked about things such as succession planning, employee engagement. These are all big picture challenges that every business owner has to deal with, and it seems like every time you turn around, there’s another danger out there.

And that’s where your insurance broker comes in. You’re kind of the danger reducer, or the danger assessor, if nothing else. That’s what the step-by-step assessment plan is, is to try and walk a business owner through and say, “Here are some of the topical issues that business owners need to address today, and I just want to gauge your level, your organization’s level of awareness, what action plans you have, on this topic, that topic, topic C, D, E.”

That’s what the step-by-step risk assessment plan is. It’s less about what we would consider traditional insurance approaches, which is values of properties and cash flow and that kind of stuff. This is much more about, let’s look at the business holistically. What dangers are out there, and what can we do to mitigate them so that we buy insurance, really, just as a last resort. If we can eliminate the problem, then we don’t even need to insure it, probably, or we can reduce the amount of insurance we need.

It’s less about what we would consider traditional insurance approaches, which is values of properties and cash flow and that kind of stuff. This is much more about, let’s look at the business holistically. What dangers are out there, and what can we do to mitigate them so that we buy insurance, really, just as a last resort.

So, let’s just, for the sake of argument, assume you’ve completed this assessment. Now you and I are sitting across the table from each other and we identify, “Paul, you’ve got this problem here,” how do you help me get that fixed? What steps do you take me through? What kind of resources do you bring to the table to help me resolve a problem that I have, and obviously I have the problem because I’m not aware of it. So how do you help bring up my awareness level? How do you educate me to be a better business owner?

Colin Rooke: Well, I’m going to back up a little bit. You talked about, again, our assessment process that talks about a lot of issues outside of insurance. And for us, that’s where it all starts. That’s how we get to the insurance, by understanding levels of risk. We talk about insurable risk, we talk about non-insurable risk. But, before we can make a recommendation, we need to know what the heck’s going on. We’ll find, through our journey, that yes, there are some issues, like property, the potential of property damage, that we will rely on an insurance policy for, but other areas like changes in the economic environment that we don’t necessarily have a policy for. 

So to answer your question about, “Okay, we’ve uncovered some things, what are we going to do?” Let’s choose a broad topic like changes in the economic environment. In the last six months, that is something that we find our clients are discussing quite often. And it’s not doom and gloom, it’s really levels of understanding. It’s the uncertainty, you know, “I don’t know what’s going on with the presidential election, commodity prices are low, what’s happening with oil and gas, how are the changes in Alberta going to affect Saskatchewan, or is this the tip of the iceberg or the worst we’re going to see?”

And again, our assessment is designed to really learn what keeps the business owner or the management team, what’s keeping you up at night? So, again, choosing a topic like economic uncertainty, I am not an economic advisor. My job is to identify risks. My job is to have those discussions and learn and talk about the potential impacts to the organization. Okay, so that’s your biggest risk, it’s what’s keeping you awake. What are you doing to work on that, and is there a way we can help?

In that case, and you know, Paul, this is into your world, we say, “Okay, we think we’ve heard this topic enough that we need to do something as a company, on a broader sense.” So we had you talk to our clients and give an economic update. We said, “Look, this is coming up quite a bit. Is there someone that we could have come in and explain to our clients, or just provide some clarity?” So it’s a large enough risk, it’s impacting our clients. I’m not an economic advisor, you know, an expert by any sense. But I am an expert at identification, so we put our clients in a room with yourself and we had a discussion about the economy, and we gave them the opportunity to ask any questions they had to hopefully have them feel a little more comfortable with what’s going on.

Paul Martin: And this is pretty typical of the way you approach it, so we talked about the economic piece, you asked me to come and speak on it. I assume if the topic du jour is cyber security, you will go somewhere and find a cyber security expert who will come in and kind of paint a picture of, “These are the big issues, this is where the scam artists are living today. This is the kind of activity that they’re doing, this is what you need to look out for.” On employee engagement, you’ll have somebody who’s got an HR background, and on and on it goes.

Colin Rooke: You know, that’s an excellent point. Just to, again, discuss cyber crime, and I’m not going to go into all the tools we have, but again, I don’t focus on cyber crime specifically. I focus on the risk. We have tools, we have assessments to determine level of preparedness. We have policies, we have procedures. What I’m not an expert in is the actual, sort of the tech side of the business. So again, that is a risk that comes up almost every single time. So what we’re going to do in November, and I’m sure we’ll talk about it in a future show, is we’re bringing in an expert … I would argue he’s not only one of North America’s leading experts, he’s one of the world’s leading experts. He’s out of Toronto, and we’re going to put him in a room and we’re going to have a client session, he’s going to explain exactly what cyber crime is. But he’s also going to show just how easy it is to have a breach. He’ll give real world examples. He’ll explain it in detail. I’ve seen him more than once, I’ve been into Toronto, I’ve traveled out to Denver, Colorado, and watched him speak. But it’s just another example of, “Okay, we can help on the individual. We can work on policies and procedures. We can share that information with the insurance company. But to take it a step even further, we’re going to bring in an expert, and we’re going to teach you something.” It’s all part of the ongoing risk education. We want our clients to be as efficient as possible, and we do that through education.

Paul Martin: So this is one of the tools that you bring back, you say to your clients, “Come and listen to this speaker. You’re going to learn some things here that you can apply in your business, and if you do adopt them, you do A, B, and C as advised by the expert, the risk to your business will come down. And that makes it easier for me as your insurance broker to go to the market and say to insurance companies, you should write a policy on this company because look at all the wonderful steps they’ve taken to educate themselves, and how they’re conducting themselves to get better business and to be less of a risk to you, insurance company.”

Colin Rooke: You know, exactly. And we talk about the reports that we use to guarantee top of stacks admission, which is a term we use a lot of other buyers, but I’m going to share with the insurance market if my client attended this session. If you look back at what you’re doing now, when was the last time your insurance broker said, “I’m going to be sharing with the insurance market all the educational seminars that you attended that pertain to risk, and I’m going to use that as a negotiation piece.” It’s something that we believe is the right thing to do, but also again, it’s all part of the story. If we can control what you’re seeing and hearing and doing, we’re best prepared to share that with the market.

I’m going to elaborate sort of a little further too, that we talked about every organization is different, and their needs are different. So when it comes to the speaker, and even such as yourself, if we have a client that just really needs that one-on-one, the risk is great, or again, their level of preparedness for cyber crime. Or just, again, the inherent risk because of all the moving parts, we will also, and we are planning to with the cyber crimes speaker, is have one-on-one sessions as well. So, you went to the big session, but we’re also going to put you in a room with the guy, because due to the risks we’ve identified.

Paul Martin: You’re listening to Colin Rooke, the commercial risk reduction specialist with Butler Byers commercial insurance. We’re going to take a little break, and we’re going to come back and pick up this topic. Colin, thanks, and just sit tight, we’ll be back in a moment.

Colin Rooke: Thanks, Paul.

Paul Martin: Welcome back to “Risky Business”, Commercial Insurance with Butler Byers. This is Paul Martin and I’m speaking with Colin Rooke, the commercial risk reduction specialist with Butler Buyers Commercial Insurance. Now just before the break we were talking about how you, as part of your step by step risk assessment program, once you’ve identified some potential problem areas for a client, you’re prepared to bring in … You have access to experts who can come in and help them work their way through these problems and figure out ways to … Basically to reduce the problem or to mitigate the risk and I want to just keep exploring that a little bit. And the kinds of topic areas that you are finding these days. You mentioned cybersecurity, cyber risk is a problem. What are the other hot topics that you’re hearing about today? What are business people talking about in this community?

Colin Rooke: Employee engagement comes up a lot. Especially as the organization grows. You know you can have great HR but when you get to a certain size, it’s just really hard to feel like management is connecting with the staff. And so it is a concern. And when we start talking about employee engagement and some of the risks of not having a firm grasp on, do my employees really like working here? Or really even what the percentage is. You could say, well 80% love it but 20% don’t. So when we have those discussions, it really comes up a lot. And it’s really a simple fix from our perspective. Now solving the problem may not be, but having an understanding, we can administer a very simple employee engagement survey that is pretty black and white. How do I feel about the organization I work for and it’s about 10 questions but it will really give the business owner some insight into, I might have to dig a little deeper into this one. If that’s the case, again, I’m not an employee engagement expert. We’re experts at identifying the risk, quantifying the risk, prioritizing the risk. We will put the company in touch with someone who is. We do talk a lot about succession planning and it really ties into business perpetuation.

What’s the plan to maximize the value of the organization? And really, again, what is the plan? Do you plan on closing the doors? Do you plan on transitioning the business to a family member? Do you plan on selling the business? Depending on your answer it’s a completely different path.

Again, another example where we’ll identify the risk, we do what we can, we put it into a plan, a working plan, that we’ll address but we will rely on outside help for our clients. Again, talking to the experts. And back to my original point, if we aren’t having these conversations prior then you’re not going to be in front of the experts you need to be in front of because we don’t know what you need if we’re not talking about risk, if we’re not talking about needs.

Paul Martin: This really sounds quite unique. I mean your offering is different than just about anybody in the marketplace. Am I right in that assessment?

Colin Rooke: You’re right.

Paul Martin: And you guys have invested heavily in this thing and I guess I’d ask, what kind of results are you getting? What are prospects and clients saying to you about this process that you put them through?

Colin Rooke: You know, you asked about the results and in our line of work, unless we’re working with a client that’s opening their doors for the first time, for Butler Byers to acquire, gain, new clients, someone has to lose a client.  First of all, we don’t want to lose who we have so we feel it’s important that our clients feel taken care of, that there’s nothing else out there that’s comparable to this. But we want to work with everyone because we feel that everyone can benefit really from the work that we do. So when we make a case to a prospect, to a potential new client to Butler Byers, it really helps us make the case that yes, you have an insurance broker now. Yes, there’s a product in place. You know you’ve probably even taken care of … Up until now, our approach never is to go after the broker. We’re not looking for gas.

We’re not looking for mistakes. We’re not questioning the level of service or the credibility. We also don’t discuss insurance markets. We don’t say, well we are 10 times the size of your small brokerage so there’s no way that you can be adequately looked after. Our approach is, look, we just simply provide more. It’s a broader offering. We’ve got other areas of expertise that we’ve packaged together that yes, includes an insurance product but we are selling our expertise, our education. We’re selling to our clients, back to our clients, all that work we do in improving performance.

Paul Martin: And one of the things I find very curious about this is there are risks that you can identify, challenges and problems business owners will face, that you really can’t buy insurance for anyway, but you still look at these things. I think about issues such as reputation management. Can’t really buy a policy to maintain my reputation yet you spend a lot of time talking to your clients about that.

Colin Rooke: Yeah. It’s funny, the point that you just made was going to be my next point but we talk about reputation risk constantly and depending on the line of work you’re in, the risk is greater. And so, when it comes to … you know you’re a manufacturer and you have a small fire and it’s fairly contained and hasn’t hurt anyone, is there a large reputation risk to the company? No. But if you are in a very public business and maybe there’s a liability claim that hits the media and it’s being discussed all over, at that point the size of the liability claim is the least of your concern. It’s the reputation risk management. The challenge that we have with clients is, I think every business would agree that … They don’t want to go through something like that. But they understand it, but it’s tough to get a client to proactively work on it. Most would prefer to wait until they’re faced with it. As you … We’ve said in a side conversation that you show up to your building and there’s police surrounding it, now I have to deal with it.

So again, to help us better create, I guess the urgency. Again, it’s one of those situations where we’re gonna bring in a firm that’s experts on reputation risk to discuss that topic with our clients to just better help their level of understanding. We can identify it. We can put together a reputation risk management plan, but part of our job is, again, creating that sense of urgency.

So if we can’t quite do that, we’re gonna bring in experts that can and they’ll be able to provide real-world examples that our clients can understand.

Paul Martin: You know, Colin, this is quite interesting. I mean there are a million things that face a business owner every day and you’re just kind of the answer-bringer. You come and you’ll turn the temperature down on a few of them just by really identifying them and saying, “And you know what? We can handle this and here’s how we’re gonna deal with.”

Colin Rooke: We could do a show a day.

Paul Martin: Yeah exactly. Well thanks for this. As always, very insightful, very informative. You’ve been listening to Colin Rooke, the commercial risk reduction specialist with Butler Byers Commercial Insurance. This is “Risky Business” Commercial Insurance with Butler Byers and I would encourage you to give Colin a call. Just dial him up at Butler Byers and say, “You know, I want to dig into this a bit more. I’d learn a little bit more. He’d be pleased to take your call and sit down with you one on one and just explore this a bit further. Thanks again,  Colin, for joining us.

Colin Rooke: Thanks Paul.

Paul Martin: We’ll be back next time.