Risk Management for Small Businesses

Legal risk management has always been important for individuals, businesses, and nonprofit organizations. That's changed. In the current economic environment, when the unquoted claim has to be paid out of his pocket, legal defense costs or a settlement or judgment may be the difference between survival or failure, which has always been important, necessary and essential. But this is not about survival. Effective risk management will now better position any business or business organization for greater success when the economy reverses.

While since the stock market crash in 2008, there were many news about risk management in the Internet and in business and insurance publications, it was mostly without the definition of the term. Most humming is about corporate risk management and insurance quotes in the context of insurance and banking / financial sectors. Given that economic risk taking is a topic, this may be an interesting thing, but not the management of smaller organizations. managing risks from day to day.

What we really care about is trying to protect individual entrepreneurs, small businesses, non-profit organizations and their members from bad things. Or at least from the consequences of bad things (usually financial). We can access this Wall Street mumbo jumbo, right? I mean, look where this kind of thing took us.

This means that any effective risk management program should start from the academic risk management theory because it has a lot of meaning and provides an excellent schedule. The good "academic" definition of legal risk is as follows:

Legal risk is the risk of uncertainty due to legal proceedings or uncertainty in the applicability or interpretation of contracts, laws and regulations.

Depending on the type of business or organization, it faces certain legal rights risks, but generally, in a "big picture", businesses and organizations face the same two general categories of law:

1. Contractual Risks. (Your contracts are legally binding and enforceable, how do you share legal responsibility, specifically what is your responsibility, what is the responsibility of the client or clients if your customers or clients fail to fulfill their responsibilities, what are their options?)

2. Operational risks (as determined by the Basel Committee, an international committee that has played a leading role in the harmonization of banking rules between jurisdictions as "the risk of loss arising from inadequate or unflagging internal processes, people and systems or external events" ).

So as long as you are not related to any other party with a contractual obligation, all your internal processes and systems are flawless and you or your employees, subcontractors or suppliers are ever mistaken, you do not have to worry about risk management. (Of course, he says this promise.)

Risk management in the purest form is simply:

1. Identify risks.

2nd Identification of the potential impact of those risks.

3rd Deciding how to eliminate or minimize the potential impact of the risks.

So, when I help a client deal with legal risks, I have two general goals. These are: (a) avoiding legal liability so that my client does not take any risks (for example through a risk mitigation contract); and (b) take care of the potential adverse effects of legal liability risks that can not be avoided (for example through adequate insurance cover).

Large corporations have their own internal risk management staff and lawyers who deal with minuci. Individual entrepreneurs, small businesses and community organizations do not have such support. What may be a feeling like a "label".

Sometimes managing your own risk management is a simple task. There is a scuba diving that involves the danger of falling from a high altitude to the ground, tilting it and becoming a human pancake, so use a parachute, make sure it is properly folded and packed to safely wear and have a spare slide . There the risk is easy to handle. But this is because (a) there are no uncertainties about the nature or potential magnitude of the risk, and (b) there is only one way to minimize it. (To tell the truth, if I were, I would avoid that risk because, since I could not jump – or better, I would simply not get into the machine – but hey, that would be a great example for me and this article.) [19659002] Most business activities involve more uncertainty about legal risks, which in turn means that the decision to eliminate or minimize the potential impact of uncertain risks necessarily involves a combination of related legal mechanisms and therefore requires assistance from a business lawyer. These mechanisms, including business entity creation, contractual risk sharing (eg harmlessness, damages and / or warranties) and the implementation of effective business systems to address operational risks such as potential employer obligations will provide you with the best possible maximum protection individually and for your business or organization. And like a jigsaw puzzle, when everything is in agreement, it's pretty pretty and it makes sense.

If not all of them fit, if it does not make sense if you are vulnerable to vulnerable vulnerability risks, it's time to consult with an experienced lawyer about implementing the appropriate mechanisms or implementing the necessary systems to ensure that you they can keep their future without worrying too much about the past.

Source by sbobet

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