Ten years ago, who could have predicted that importing construction materials from overseas would lead to thousands of defective building claims? Or predicted that mold would become a standard-issue claim in the construction industry?
Fortunately, few areas of risk crop up overnight. Most emerge over time, giving well-informed and forward-thinking risk managers a head start on preventing loss. There probably were a few experts who, because they had kept their ears to the ground, were not surprised that certain imported products didn’t live up to U.S. standards. Here are a few ways you can stay ahead of the curve in preparing for emerging risks.
Look and Listen
To make sure you’re in on the ground level of emerging risks, read trade journals, get involved in professional organizations, and join industry standards and codes committees to improve your awareness of potential risks.
You can also learn a lot by reading about the industries your organization interacts with, such as transportation or energy.
Take Your Seat at the Table
For the most part, the days when organizations viewed risk managers simply as insurance buyers have passed. Many risk managers now have an enterprise risk management mindset — the idea that risk is inherent in every single aspect of your company’s operations from product development through sales — and companies are realizing this mindset is integral to its business strategy discussions and decisions.
When a new product is being developed, for instance, companies must discuss not only whether a need exists and how to satisfy it, but whether the type of product being considered could open the company up to new risk exposures and whether a cost/benefit analysis has taken these risks into account.
Rely on the Experts
When attempting to learn about emerging risks and what you can do to meet their challenges, it’s important to remember that you’re not alone. Your agent or broker and insurance carrier are equally invested in protecting your organization against loss and should be ready and able to share observations and informed opinions about where the next risks will originate. Then, together, you can determine whether your current coverage addresses such risks and, if it doesn’t, strategize about how to obtain new coverage.
No one can accurately predict the future, not even industry specialists. But you can resolve today to learn more about the risks you’re likely to encounter and take steps to minimize their impact.