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Know Your Risk Management

By: Sallie Deitz
Posted: June 2, 2009, from the June 2009 issue of Skin Inc. magazine.

page 8 of 12

Insurance is also critical in risk management, so you should seriously consider purchasing the following types of coverage.

  • General liability, including product liability coverage. Covers against lawsuits arising out of the operations of a business.
  • Property coverage. For buildings, if owned, and their contents, including furnishings, fixtures, supplies and inventory.
  • Business interruption and extra expense coverage. Covers loss of income following a covered loss, such as a fire.
  • Workers’ compensation. Covers on-the-job injuries and disease.

Also, be on the lookout for sleepers, or hidden risk management issues. Among the most prevalent of these are:

Product recalls. These can be very expensive and are not automatically covered under a general liability or product liability policy, though separate coverage may be available.

Employment practices suits. Issues such as sexual harassment, wrongful termination and a hostile work environment usually come without warning. Defending yourself against a single suit—even if groundless—can cost $25,000 or more in legal fees. Separate coverage, called employment practices liability insurance, is available to protect employers from employees’ claims.

Crisis management and disaster recovery plan. These should be included in overall risk management plans. Businesses should plan ahead for all possible contingencies, including incidents of workplace violence, product recalls and temporary locations with emergency supplies and inventory following a property loss.

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