BIP Winter 2024

Professional Development

3 Property

Whether it’s buildings, equipment, tools, data,

vehicles or other forms of property, all can be vulnerable. “All businesses need to protect themselves against the hazards that could exist relative to where they are geographically, such as fire, flood, tornadoes, hurricanes,

6 areas of business risk to monitor Taking a proactive approach to risk management is essential for brokers to safeguard their business across six key areas.

et cetera,” said Jasinski. 4 Operational

Operational risk exposure can mean the risk of

disruption from local events or loss of key individuals. “Let’s say a contractor goes out of business, and they’re a major resource for ... your business operations. That’s a business-associated risk that needs to be contemplated in your grand scheme of risk analysis,” said Jasinski. 5 Reputational Reputational risk is often overlooked but can have significant consequences. Bad press, whether from articles, local TV news or bad reviews, "can result in an unfavorable outcome for a client, associate or employee. This type of stuff is a very big business risk for organizations,” said Jasinski. 6 Liability Professional liability is the No. 1 liability exposure for insurance agents and agencies, according to Jasinski. He said the top three causes of E&O loss for life and health agents and agencies include: • Failure to disclose something in a transaction in the sales process. • Misrepresentation, which is erroneous disclosure. • Incorrect or incomplete applications.

While avoidance is one way to eliminate or reduce business risk, it is not a foolproof method. It’s critical to take a proactive approach to risk. “Risk comes upon us every day, and we have to make split decisions. Avoidance is certainly one way to do it — by not partaking, staying removed or ignoring,” said John Jasinski, SVP, CalSurance, a division of Brown and Brown Program Insurance Services Inc., during a recent NABIP webinar. “But sometimes that’s not a good business decision.” Alternatively, Jasinski, who is an Associate in Risk Management (ARM), shared six areas of business risk actively to monitor. 1 Legal Licensing comes with the territory for insurance agents,

and so do the consequences of noncompliance. “If we are found to be out of compliance, for example, operating without a license, or we miss renewing a license, we can face loss of license,” said Jasinski. “This is obviously a legal business risk of proportion that could shut down part of the business

TIP: NABIP’s exclusive E&O Insurance Program, in partnership with CalSurance, offers competitive

revenue stream.” 2 Security

Cyber liability insurance is essential for businesses

rates and expanded coverage. Reach

that handle data or R&D. “Frequent password changing is key to security,” said Jasinski. “Additionally, protecting trade secrets is another critical security element, especially for companies developing technology, goods and services.”

Account Manager Lindsey Pilla at lpilla@ calsurance. com.

retrorocket / iStock, Hase-Hoch-2 / iStock

14 bip magazine Winter 2024