Worst Case Scenarios: A Conversation About Risk - Workshop Takeaways

The CATALYST wrapped up an insightful workshop facilitated by Jän Simon with Foundation Insurance Services, Worst Case Scenarios: A Conversation About Risk. The workshop focused on one of the most critical aspects of running a successful business: risk management. The discussions were eye-opening, and the key takeaway was clear — risk management isn’t just a box to check; it’s an unavoidable part of business that demands ongoing attention.

Why is risk management so crucial? The statistics speak for themselves. Nearly half of all businesses that experience significant loss within their first five years ultimately close their doors. Understanding risk and preparing for it isn’t just smart — it’s essential for long-term survival.

During the workshop, participants took a deep dive into the various types of risk every business faces:

• Operational Risk: Potential disruptions in day-to-day operations.
• Financial Risk: Issues affecting cash flow, revenue, or overall financial health.
• Legal & Regulatory Risk: Non-compliance with laws and regulations.
• Market Risk: Changes in market conditions impacting demand, pricing, or competition.
• Reputational Risk: Damage to the business's reputation affecting customer trust.
• Accidental Risk: Unexpected events such as natural disasters or accidents.

Each participant evaluated these risks in the context of their own business, determining which areas posed the greatest threat and might require attention.

Once risks were identified, we explored four key strategies to minimize them:

1. Risk Avoidance: Steer clear of activities that carry high levels of risk.
2. Risk Mitigation: Implement practices that reduce the likelihood or impact of risks.
3. Risk Transfer: Shift the risk to another party, often through insurance or contractual agreements.
4. Risk Acceptance: Acknowledge the risk and develop a plan to manage the consequences if it occurs.

A significant part of the workshop focused on liability waivers. We discussed how these legal documents can protect businesses from specific types of claims by ensuring customers acknowledge and accept certain risks. Best practices include clearly defining the risks involved, using straightforward language, and ensuring the waiver is signed before any risky activity takes place.

No risk management strategy is complete without the right insurance coverage. We reviewed various types of business insurance policies, such as:

• General Liability Insurance
• Professional Liability Insurance
• Property Insurance
• Workers' Compensation
• Cyber Liability Insurance

The question posed to participants was: Does your business have the right coverage? Having appropriate insurance can mean the difference between a setback and a shutdown when unexpected events occur.

As the workshop concluded, we laid out a clear path forward:

1. Risk Identification: Pinpoint potential risks unique to your business.
2. Risk Assessment: Evaluate the likelihood and impact of each risk.
3. Risk Control: Implement strategies to manage identified risks.
4. Insurance Coverage: Ensure you have the right policies in place.
5. Monitoring & Reviewing: Continuously revisit and refine your risk management plan.

The workshop may be over, but the work of safeguarding your business is ongoing. Take the time to review your current risk management practices, identify gaps, and make the necessary changes to build resilience and ensure long-term success.

The CATALYST offers a wide array of workshops. Continue to check out the calendar for all of the offerings, which are open to all Gilbert Businesses.