In January I gave METRO readers what I believe to be the 10 most important things to have in place to protect their businesses.

I’ve gone through the process of implementing these risk management techniques while working for a large manufacturer. And I understand that much of what I’m suggesting will require nothing less than institutional and philosophical culture change in the management of many companies.

The term "change" is fundamental to success in this case. Many people fear change, even if the change is literally a matter of survival. The bad comes knocking
Let’s start with the first point — "Recognize that bad things can and do happen to good people."

Risk managers often conduct reviews involving a technique called "scenario analysis." It is a process of imagining the worst things that can happen and then considering planning that would eliminate or reduce risk if they do occur. We examine the likelihood, or frequency rate, of the event and what the impact or consequences to a business will be if the event occurs. This type of planning is foreign to most people. No one likes to dwell on the possibility of negative events. However, imagine receiving a call from a state trooper at 3 a.m. informing you that one of your buses has been involved in a horrific accident. There are multiple fatalities and injuries. The initial call will inevitably be followed by more from the media, government investigators and attorneys. This is when a prepared operator will implement a crisis management plan. Your crisis management plan, if it is robust and tested, will carry you through all but the most catastrophic situations. What’s that you say? You don’t have a crisis plan? Don’t rely on insurance
You absolutely should have a plan. Many people may say, "but I’m insured and my insurer will take care this for me." If you believe it’s that simple, then you need to understand that your insurer does not work for you nor does it have to follow your directions. Like you, it operates a for-profit business. Insurers will pay valid claims if the claim does not violate any of the exemption or exclusion clauses in your policy; however, when you incur a significant loss, your premium rate will increase at renewal time. It may increase to the point that coverage is unaffordable.

Insurers typically set premium rates based on several basic metrics. These include your loss history and the level of exposure, which is usually calculated on annual fleet mileage and where you operate, such as urban versus rural miles. They will review the average losses within the industry pool and measure your performance against this. If they find that your performance is below an acceptable level, they can cancel or deny coverage when the renewal date comes around.

Your insurer will also look at your overall safety management practices, one of which is having a robust crisis management policy and response plan in place. If you find that the insurers turn their backs on you, then you may be left with no option but to apply for coverage in your state pool for high risk operators. Remember, insurers work for their businesses, not yours.

OK, you agree that something bad could happen to your business and you may have no control over whether it occurs or when. Further, you understand that your insurer will work with you up to a certain point, but it ultimately controls the claim process in your name.

What can you do to weather the storm? First, sit down with your insurer and your key personnel and develop a crisis response plan that takes into account potential damaging events. These can and should include vehicle or workplace accidents; natural or man-made disasters such as storms, flooding or terrorism; and any other scenario you can think of that could seriously affect your business.

Once a thorough plan is developed, it’s time to make it known to everyone in your business. All employees have a role to play in making the plan work. Have them sign a form that says they understand their various roles in making the plan work and, if an event occurs that triggers the plan, that they will follow it. Practice makes perfect
It’s now time to test the plan to see if it works. Occasionally schedule table-top exercises to test the program. Does it work in the scenarios it has been built for? If it does, you will sleep better. If not, adjust it accordingly, and test it again until it works flawlessly.

Over the years I’ve seen bad things happen to good people. I’ve seen how recognizing the fact that a disaster can occur, while unpleasant to think about, is an essential part of protecting a business. I’ve seen how a strong crisis management plan will help a business survive catastrophic situations and how the lack of one can shut a business down. Please, be in the former group.