Risk Management

4/30/2015

1

Risk Management

Objectives

• Legal risks to consider

• How to think about risks

• Best practices for risk management

4/30/2015

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Legal and Regulatory Risks

• Torts

• Crimes

• Statutory/regulatory compliance

• Contract

How to Think about Risks

• Exposure/consequences

• Likelihood of occurrence

• Ways to manage: – Accept/ignore

– Transfer

– Mitigate

4/30/2015

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Acceptable/Ignorable Risks

• Minor impact

• Low likelihood of occurrence

Transferable Risks

• Risks that can have major impact on company

• Transfer some or all of these risks to an insurance provider

4/30/2015

4

Risks to Mitigate

• Major impact on company

• High likelihood of occurrence

• Put measures in place to reduce risks

Summary and Best Practices

• Choose business form that shields owners from personal liability

• Get adequate insurance that covers risks

• Consult with a lawyer!