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Risk Management - A Business Insurance Primer
Now Available
In-House

  • What is Risk?
  • Risk Management Objectives
  • Risk Management Process
  • Principles of Insurance
  • The Insurance Market
  • The Impact of 9/11
  • Basic Coverage
  • Interruptions
  • Liability Coverage

Things happen. No matter what preventive steps you attempt to take...things happen. The odds-of-life (if you will) contain within them the seeds of a certain number of unpreventable, unfortunate occurrences. That's why the language has such words as "accident"..."mistake"..."oversight"..."catastrophe". . .

So "an ounce of prevention"—although a prudent technique—is not always an effective technique. And equating it with "a pound of cure" can be illusory—indeed, the ounce is often not worth even its ordinary fractional value of that pound.

Recognizing this, wise businesspersons have customarily sought to cover both flanks. On the one side, they will stock their ounces of prevention. While, on the other, they purchase the rights to pounds of cure. Those rights are called insurance.

But, as with everything in the business world, insurance is no longer the relatively simple "buy-a-policy" item it once was. Rather, it is a complex field of specialization which in some cases has Byzantine turnings. Indeed, even its name has undergone a transformation—not simply "insurance", but "risk management". To properly deal in this area—to adopt the most advantageous program for your organization—requires a heightened degree of sophistication. It requires tailored training. It requires a course of study such as the one we here present.

Risk Management provides you with a concentrated body of practical learning. It seeks to take you from theory to pragmatic application—guiding you to a workable understanding of what is best for your particular situation. It considers the standpoint of the various parties in the "protection" picture—insurance carriers, insurance buyers, insurance consultants, insurance agents, and the legal and professional advisors who serve them all.

Risk Management is presented by an expert instructor. In addition to his oral presentation, the program includes a custom-prepared Manual designed for daily reference. The overall purpose: to school you in reasonable methods of reducing your exposure to losses.

The Course Curriculum

Keystones
  1. Introduction
    1. Required Reading
    2. How to Rate Insurance Companies
    3. Job Requirements
      1. Exposure identification & analysis
      2. Political aspects
  2. Insurance Department
    1. Organization
      1. Place in management hierarchy
      2. Line vs. staff
      3. Overall objectives
      4. Organizational chart
    2. Administration & Duties
      1. Centralized responsibility
      2. Adequate staffing
      3. Manual of procedures
      4. Exposure identification
      5. Exposure evaluation
      6. Program implementation
      7. Contract review
      8. Analysis of building plans
      9. Maintenance of property value records
      10. Perform surveys
      11. Policy analysis
      12. Rate & premium analysis
      13. Market studies
      14. Maintain records of insurance required of independent contractors
      15. Review & keep records of losses
      16. Supervise claims
      17. Prepare an annual budget
      18. Annual reports
      19. Independent audits
    3. Inter-Department Relationships
  3. Evolution
    1. Concepts
      1. Insurance buying
    2. Risk Management vs. Insurance
    3. Reasons for Risk vs. Insurance Management
    4. Professional Groups
  4. What is Risk
    1. Definitions of Terms
    2. Pure vs. Speculative
    3. Criteria to be insurable
    4. A Holistic View
  5. Risk Management Objectives
    1. Pre-Loss/Risk Control
    2. Post-Loss/Risk Financing
  6. Risk Management Process
    1. Identification of Risks
    2. Evaluation of Risks
    3. Development of Alternative Techniques
      1. Risk control
      2. Risk financing
    4. Implementation of Techniques
    5. Program Monitoring

    The Insurance Market

  7. Principles of Insurance
    1. Functions
      1. Transfer of risk
      2. Redistribution of losses
      3. Retaining small known losses
      4. Transferring large unknown losses
    2. The Insurance Mechanism
    3. The Policy Contract
    4. The Insurance Premium
    5. Contact Between the Insured & Insurer
      1. Direct contact
      2. Through an intermediary
    6. The Underwriter
    7. The Adjuster
    8. Reinsurance
    9. Governmental Regulation
    10. Legal Principles
      1. Requirements of any contract
      2. Special characteristics of the insurance contract
      3. Insurable interest
      4. Concealment
      5. Representations
      6. Warranties
  8. Domestic Insurance Market
    1. Standard Market Division
      1. Life & health insurance
      2. Property & liability insurance
  9. Foreign Insurance Market
    1. Admitted vs. Non-Admitted
    2. Lloyd's of London
    3. British Companies
    4. Others
  10. Types of Risk Financing Vehicles
    1. Stock Insurance Companies
    2. Mutual Insurance Companies
    3. Insurance Reciprocals
    4. Risk Retention Groups
    5. Captive Insurance Companies
      1. Fronting
      2. Rent-a-captive
    6. Self Insurance
    7. Alternative Risk Financing
      1. Capital markets
      2. Risk securitization
    8. State Guaranty Funds
  11. Reinsurance
    1. Functions
    2. Types
    3. Cut-Through Endorsement
    4. Markets
  12. Agents & Brokers
    1. Agents
      1. Managing general agent
      2. General agent
      3. Systems
        1. American agency
        2. Exclusive agency
    2. Brokers
    3. Selecting Agent/Broker
    4. Dealing with Agents or Brokers
  13. Costs & Availability
    1. Insurance Costs
      1. Premium determinants
      2. State regulations
    2. Historical Review of the State Property & Liability Insurance Market
    3. The Impact of 9/11

    Basic Property Coverage

  14. Real and Personal Property
    1. The Standard Fire Policy
    2. Real vs. Personal Property
    3. Property Covered/Excluded
    4. Perils Insured Against
    5. Basis of Valuation
    6. Amount of Insurance
      1. Policy limit
      2. Deductibles
      3. Coinsurance
    7. Fire Rate
    8. Important Considerations
      1. Blanket vs. specific coverage
      2. Building ordinance coverage
      3. Stock reporting
      4. Waiver of subrogation
      5. Joint loss agreement
    9. Recommended Coverage
  15. Boiler & Machinery
    1. Insurable Equipment
    2. Perils & Accident
    3. Amount of Insurance
    4. Valuation
    5. Joint Loss Agreement
    6. Coverages
    7. Recommended Coverage
  16. Transportation
    1. Ocean Marine
      1. Basic contract
      2. Hull
      3. Cargo
      4. Freight
      5. Liability
    2. Inland Marine
      1. Marine definition
      2. Basic Contract
      3. Floaters
  17. Business Records
    1. Valuable Papers & Records
    2. Accounts Receivable
    3. Electronic Data Processing
  18. Automobile Physical Damage
    1. Comprehensive
    2. Collision
  19. Crime
    1. Non-Employee Dishonesty
    2. Employee Dishonesty
  20. Surety Bonds
    1. Judicial
    2. Litigation
    3. Contract
  21. Miscellaneous
    1. Title
    2. Plate Glass
    3. Credit

    Interruption of Operations Coverage

  22. Business Income
    1. Purpose
    2. Types of Coverage
      1. Gross earnings
      2. Earnings
      3. Contingent
      4. Extending period of indemnity
  23. Extra Expense
    1. Purpose
    2. Coverage
  24. Other Coverage
    1. Profits
    2. Rents & Rental Value
    3. Leasehold Interest

    Liability Coverage

  25. Liability Insurance Basics
    1. The Liability Risk
    2. Basic Law of Negligence
    3. Major Types of Liability Exposures
      1. Contractual
      2. Employer's liability
      3. Owners, landlords & tenants
      4. Products & completed operation
      5. Professional
      6. Automobile
    4. Workers' Compensation & Employer's Liability
      1. Purpose
      2. Coverage
      3. Second Injury Fund
      4. Risk Financing
        1. Guaranteed cost
        2. Dividend plans
        3. Retention plans
        4. Retrospective rating
        5. Deductible plans
        6. Self insurance
    5. General Liability
    6. Automobile Liability
    7. Umbrella Excess Liability
    8. Directors & Officers Liability
    9. Fiduciary Responsibility
    10. Employment Practices Liability
    11. Occurrence vs. Claims Made Coverage

    Competitive Quotation Procedures

  26. Formal Competitive Quotations
    1. Soliciting Competitive Quotations
    2. Selecting the Proposers - Agents/Brokers/Companies
    3. Purpose of the Specifications
    4. Preparing the Specifications
    5. Analyzing the Proposals
    6. Specifications Exhibit
The Course Director

Mr. Bernard J. McGovern now retired, Past President and Principal Consultant of Insurance Buyers' Council, Inc. Baltimore, Maryland • Specialist in risk management problems for the business community • A Chartered Property & Casualty Underwriter (CPCU), and Associate in Risk Management (ARM), and recipient of the Insurance Institute of America's "Diploma in Claims" (AIC) • Noted lecturer on insurance problems for industry associations in a variety of field, such as contracting, accounting and retailing • Past Vice President of the Chesapeake Chapter of the Risk & Insurance Management Society • Past President of the Society of Risk Management Consultants • Graduate of Georgetown University.