All businesses come with risks; however, some types of businesses carry more unique risks than others. For these types of businesses, traditional risk management techniques, such as purchasing standard business insurance, may not be the best solution.
According to http://www.arroyoins.com, combining traditional insurance with alternative risk transfer techniques can be a good solution for companies with unique risks that may not be insurable in the standard market. If your business falls into one of these non-standard risk categories, utilizing alternative risk transfer techniques may be a good fit for you.
- Unique Businesses
Standard business insurance relies on data from a large pool of similar risks to determine appropriate pricing and coverage. Insurance companies may be reluctant to insure unique businesses that do not have a large number of similar companies to use for the purpose of predicting future losses.
- High-Risk Businesses
Businesses in industries that experience frequent lawsuits, sell dangerous products or engage in high-risk operations may also be difficult to insure on the standard market, due to the increased chance of frequent or expensive claims. These companies may be good candidates for large deductibles, pools or risk retention groups.
Standard business insurance is a valuable risk management tool; however, it is not the only tool in the toolbox. Crafting a unique risk management strategy for your unique business may produce better risk management results than standard insurance alone can provide.