Risk Management 101

Mar 05

Article Author

Andrew Hazlewood Andrew Hazlewood

3 questions:

  • What will you do in a worst-case scenario? 
  • Does your team have an evacuation plan in place? 
  • Where will you hold services or programs if your facility is not usable? 

I usually get a shrug of the shoulders when asking these types of questions with clients. It’s not that they don’t care, just that they honestly have never thought about it. I don’t blame them, they have a lot on their plate already. But really, what will you do if something happened tonight and you couldn’t provide after-school activities? I’m sure bible study could be rescheduled, but what about Sunday service?

Do you have keys to another building that will fit all the kids that come to play basketball 3 times per week? Or classroom space for them to do homework? Will the school district let you use their gym or auditorium for Sunday service?

Risk is everywhere, and it’s not possible to avoid it all. It is possible, however, to manage it. Over the next few months we’ll be providing information and resources you can use to help mitigate risk in your church or nonprofit. We’ll call it: The CTG Risk Management Series.

You can manage risk in 4 different ways:

  1. Avoid Risk 
    1. This is that great idea you have that, after careful analysis, is not such a great idea. We avoid these altogether. Back to the drawing board, in a sense. 
  1. Retain Risk
    1. You have a good idea, there is little to no risk, so you accept the fact that if a loss occurs it’s ok to retain the damages.
    2. The deductible on your insurance policy is an example of retaining risk. You are retaining a portion of the loss by paying a deductible.
    3. Retaining risk can also be done unintentionally by having gaps in your insurance policy…
  1. Transfer Risk
    1. Purchasing an insurance policy is an example of transferring risk from yourself, or organization, to the insurance carrier. 
    2. Waivers are another example of transferring risk. You can download a sample waiver here.

The last type of risk management is where we’ll take a deep dive in this series:

Controlling Risk

Controlling risk helps us to reduce the impact of a loss or avoid one altogether. I did a webinar recently that started the discussion for controlling risk, watch it here. To summarize, from fire extinguishers to training your staff and volunteers, there are a ton practical ways and easy steps you can implement now to help reduce the probability and impact of a loss. 

Stay with us as we begin to share different ways you can manage risk.