Insurance is Not Risk Management

Risk mitigation measures are usually formulated according to one or more of the following major risk options, which are:

1) Design a new business process with adequate built-in risk control and containment measures from the start.

2) Periodically re-assess risks that are accepted in ongoing processes as a normal feature of business operations and modify mitigation measures.

3) Transfer risks to an external agency (e.g. an insurance company)

4) Avoid risks altogether (e.g. by closing down a particular high-risk business area)

Remember: Insurance is risk transfer and  is usually the most expensive way to deal with risk.