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Insurance Risk Management : 10 Tips to help businesses avoid or reduce claims

Charleston Insurance Group, Las Vegas, NV
Charleston Insurance Group, Las Vegas, NV
photo courtesy of Charleston Insurance Group

If you are in business and deal with people, there will always be a potential for problems.Here are 10 tips to help mitigate the risk of claims.

Tip 1: Business Agreements should be in writing. Verbal agreements made and sealed with a handshake are no longer sufficient to avoiding problems or to insure things will get done as agreed.

When you have written agreements you have documents to turn to. To be the most helpful, these written agreements should provide answers about how issues will be handled , should they arise.

Tip2: Fee arrangements should be in writing with clear terms and expectations set between the parties.

If you are in business and that business provides a services, making sure your customers and/or clients are clear about the fees you are charging for those services and the remedies in place if the services are not provided as agreed upon.

Tip 3: Communication is the key to avoiding problems. This applies across all fields of business.

"If you're building a home for a customer and there are problems with the construction process, communicating with the customer about issues should help you to find the pathway to creating a better outcome than if you don't tell them about the problems. "

"Communication helps to build your business and reputation if you inform your customers and clients about the progress you are making in the business transaction with them.Communication is the key, whether the news is positive or negative. Keep people in the loop so they know what's happening."

Tip 4: Have quality controls in place.

Monitor your business results from a number of standpoints. Financially, you might need internal audits if you running a large company or if you have a smaller company you may want to hire a CPA to go over your books and finances.

"The most basic and often the best tip I can give a business is to get professional help when you are structuring the business. It pays to build a business on a solid foundation, not quicksand.

"Hiring professionals to guide you is an expense, but your success and protection should be considered an essential and valuable."

Tip5: Understand your insurance coverage.

When asked about how clear customers are about their insurance Monica explained ,"Sadly, there are many business owners who are not clear about what their policies will and will not cover for them. "

Tip 6: Read your insurance policy before you sign it.

As an owner of a business, you have responsibilities. Take the time to read the small print and ask any questions before you sign your documents.

Tip 7: Determine if there are any conflicts of interests before entering into business arrangements.

If you're a fan of the ABC-TV series, Shark Tank, you might have heard various "Sharks" decline making offers on potential business investments being offered to them in the "Shark Tank" due to conflicts of interest with other companies they already invest in.

This teaches us that we have an opportunity to learn from these leaders about openly and honestly taking responsibility to avoid risk and potential problems before they happen. This is a business best practice worth following.

Tip8: Document your business transactions.

This means to keep track of the progress of your business interactions . This documenting your business includes keeping records about phone calls, quotes prepared for products or services, correspondence, meetings, and business/services provided. It helps to have a "trail" of information to look back upon to understand how this business was "handled" and how a client/customer was serviced.

Tip 9: If you have staff members working for your organization,train them . Have clear business policies and procedures in place.

The work and activities of your staff members can be and often will be included in litigation. If there is litigation over a matter there could be demands to produce notes in files, e-mails, online activities, cellphone usage, and social media participation.

Tip 10: If you have reason to suspect there is a potential problem with your one or more of your staff-members, investigate on your own as soon as possible.

Would you rather reduce your risk with a small fix or wait for a potentially big claim and a huge problem? Business owners have an obligation to inform their insurance carriers about potential problems they are facing.

Monica Plaxton-Garin, owner of Charleston Insurance Group said, "Business owners often want to know why they need insurance and what type of protection their money will them."

"The key to having insurance is hardship avoidance," Monica explained. "Would it be a hardship for you to lose your personal belongings, your businesses belongings, or your business as a whole?

If you say "Yes" to any of these categories, then protecting your assets with insurance should be something you get information about and make decisions to do."

Is there a type of insurance that businesses don't realize might benefit them? "E&O, Errors and Omissions Insurance policies can benefit many service providers who often don't consider purchasing these types of policies."

To listen to this interview with Monica Plaxton-Garin go to http://www.blogtalkradio.com/Successipes

For insurance questions find Monica Plaxton-Garin http://www.CharlestonInsuranceGroup.com

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