How Do You Define Risk Management?
What is Risk Management?
Risk is inherent in everything we do.
Risk management entails identifying, understanding, analyzing and then addressing risk to make sure organizations achieve their objectives.
All companies face a variety of risks, whether financial, property damage, business interruption, supply chain, loss of key personnel or personal injury. You can purchase insurance to cover these kinds of losses.
What’s better than insurance?
Avoid those losses in the first place, by reducing the likelihood of their occurrence.
Unfortunately, many companies overlook one of their greatest risks… Contractors and Suppliers
In a speech on risk, Sam Mannan (past Director of the Mary Kay O’Connor Process Safety Center) said that contractors present one of the highest probabilities of real loss to companies.
An insurance manager recently told us that fully Half of the claims paid were directly attributable contractors.
So how best to manage the risk that contractors pose when working on your property?
Obviously, your project management team will have to implement control procedures, but there are three key steps you can take to optimize your safety management process:
- Prequalify all contractors to identify those with the safest record of performance;
- Educate and test all contractor employees about site hazards, and your safety procedures;
- Verify contractor compliance with your safety program.
These functions can be implemented in-house but are typically distributed across different departments (EH&S, Purchasing, Finance, etc.) and assigned as a part-time responsibility (with the potential for errors and omissions that can happen with part-time focus).
The FIRST, VERIFY service can be customized to meet your specific safety management requirements:
- Contractor & supplier prequalification web application
- Certificate of insurance management services.
- Customized online safety orientation services
- Remote safety audits & more
Are you managing the risk introduced by your contractors and suppliers?