Hardwood Floors December 2017/January 2018

BUSINESS BEST PRACTICES BUSINESS BASICS

By Barbara Dunn O’Neal

Getting Down to the Basics: Risk Management 101

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Risk Avoidance e best way to manage a risk is to ensure the risk never happens in the rst place. at means that you and your sta are ensuring the safety of yourselves, your customers, and the public as a whole. On a job site, in an o ce, or in a warehouse, you must be diligent about inspecting the area on a regular basis to make sure there are no potential hazards. Whether it’s an electrical cord that someone could trip on, or a large box of materials barely hanging on to the top shelf, regular inspections can make sure the “bad thing” or injury doesn’t happen in the rst place. Safety should continue to be the top priority, and any complaints of safety problems or issues should be investigated promptly. Risk Shifting One of the most e ective ways to manage risk is to shi risk to others. An example of risk shi ing is indemni cation. e concept is that the company shi s risk to the party that can best control the risk. For example, if your company is hiring another company to do a oor installation, the risk is that the installation will be improper or someone will get hurt. In this case, the company can shi that risk to the installer by asking it to indemnify the company in its contract with the company. e indemni cation language states that the installer will indemnify and hold the company harmless (from a nancial standpoint) from any claims due to the installer’s negligence. Here’s a sample indemni cation clause:

No matter which facet of the hardwood flooring industry you work in, managing risk is an every day, all day project. Let’s take a look at risk management techniques (“tools”) that you and your company can begin adding to your risk management plan (“toolbox”).

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