Commercial Exposure and Risk Management Insurance

Exposure Identification – Commercial

The first step in the Risk Management process is to inventory your businesses assets as well as those activities that create risk. It is almost impossible to create an exhaustive list of every item or activity that creates an exposure to loss given the diversity of business activities however the following list may trigger your thought process.

Your Business

  1. What industry are you in?
  2. What is the primary nature of your business?
  3. Do you have any subsidiaries or joint ventures that operate in different industries?
  4. Do you have any other operations?
  5. Do you have any discontinued operations?
  6. What are your hours of operation? How many days a week are you open?
  7. Do you have a have a formal written safety program?

Your Buildings and Physical Plant and Land

  1. Do you own or lease the building you operate from?
  2. Is the building up to current building code requirements?
  3. Does the building have central station burglar, fire and temperature alarms?
  4. Is the building sprinklered?
  5. When was the HVAC system last upgraded?
  6. When was the roof last replaced?
  7. When was the electrical last upgraded?
  8. When was the plumbing last upgraded?
  9. Is there a habitational exposure in the building (apartments, hotel, and/or condominium)?
  10. Is there any other occupant in the building that creates a catastrophe or other hazard to your business, such as fire, explosion or chemicals?
  11. Are there any businesses located next to or adjacent to your building that create a catastrophe or other hazard to your business, such as fire, explosion or chemicals?
  12. What is the replacement cost value of the building?
  13. If the building is leased, what is the value of all improvements or betterments made to the premises?
Your Business Personal Property
  1. What type of business personal property exists on the premises?
  2. What is the value of all business personal property to maintain or service the premises?
  3. What is the value of all machinery and equipment?
  4. What is the value of all furnishings and fixtures?
  5. What is the value of all business personal property that is raw material?
  6. What is the value of all business personal property that is finished product?
  7. Are the values seasonal or subject to fluctuation?
  8. Does any of the material or finished product need to be refrigerated or to be kept at certain temperatures to prevent spoilage?
  9. What is the value of all computer and telecommunications equipment?
  10. What is the value of all computer software?
  11. Do procedures exist to back-up all data and software frequently?
  12. Are back-up records maintained off-site?
Business Interruption
  1. What is your expected net income before tax for the next 12 months?
  2. If business were suspended, what expenses would still continue during that 12 month period?
  3. What is the value of those expenses that would continue?
  4. Would you maintain all payroll or just management salaries?
  5. What is the value of those salaries that would continue?
  6. If your building were destroyed, how long would it take to resume operations at the same location?
  7. If your building was destroyed, would you be able to continue operations from another location?
  8. If your building was destroyed but you could operate from another location temporarily, what extra expenses would you incur to continue business operations?
  9. When operations resume, do you expect net income will be restored immediately?
  10. How long will it take for net income to reach pre-loss levels after the resumption of operations?
  11. Does the business depend on outside sources for heat, light, water or power?
  12. Do you use any special equipment that could cause operations to be suspended if damaged?
  13. Are you reliant on an “anchor” tenant for your flow of business?
Home Business
  1. Is your business operated from your home?
  2. What kind of business is it?
  3. Do customers or employees visit your office on a regular basis?
  4. What is the value of the business property maintained in your home?
Workers Compensation
  1. What states do you and your employees work in?
  2. Do your employees travel throughout the U.S.?
  3. Do employees ever travel outside the United States to work?
  4. Are operations performed on docks, piers, wharves, etc., along navigable waters?
  5. Do you own, or jointly own with another person, partnership or corporation, operate or lease aircraft/watercraft?
  6. Any work performed on barges, vessels, bridges over water?
  7. Are operations performed on US defense bases?
  8. Do operations involve migrant laborers?
  9. Do any employees predominantly work at home?
General Liability
  1. What operations are performed by you on premise?
  2. What operations are provided by you off premises?
  3. Do you have adequate and well marked exits?
  4. Do they comply with the NFPA suggestions concerning the number, size and arrangement?
  5. Are employees instructed in proper evacuation procedures?
  6. Do you own, hire or lease any watercraft or aircraft?
  7. Do you have playground facilities on premise?
  8. Do you sponsor any athletic teams?
  9. Do you provide any medical care?
  10. Do you provide any child or adult care on premises?
  11. Do you sell or serve food or alcohol?
  12. Is the food prepared on premise?
  13. Are food handlers required to use proper hygiene techniques?
  14. Has the business ever received a citation from the Board of Health?
  15. Are cleaning materials stored in a separate area from food storage?
  16. Do you own or rent any parking facilities?
  17. Do you charge a fee for parking?
  18. Do you offer valet parking?
  19. What is the condition of the parking area?
  20. Are the parking facilities well lighted?
  21. Do you have arrangements for prompt snow and ice removal?
  22. Do your employees meet regularly with customers off premises?
  23. Do you have criminal and/or background checks done on all employees prior to hiring?
  24. Do you have any personal property of others in your care, custody or control for which you may be held legally liable if damaged, lost or stolen?
  25. Do you lease your premises?
  26. Who is responsible for insuring the building?
  27. Who is responsible for maintaining the building?
  28. Is there a written hold harmless agreement?
  29. Have you contractually assumed liability?
  30. Do you use subcontractors?
  31. What kind of work is performed by subcontractors?
  32. Do you have written contracts with all subcontractors?
  33. Do you require evidence of insurance from all subcontractors?
  34. Do you have minimum requirements of insurance?
  35. Do you advertise products, goods or services?
  36. What media is used?
  37. Do you have a Web site?
  38. What products do you sell?
  39. What services do you provide?
  40. Do you provide professional services that have a “malpractice” exposure?
  41. What could happen if your products service or advise does not perform according to expectations?
  42. Are written disclaimers provided on all material provided with your products and services?
Your Business Autos
  1. Does your business own or lease cars?
  2. Do your employees drive their own cars on business?
  3. What is the replacement cost value of your cars?
  4. Do you carry passengers for hire?
  5. Do your deliver your product?
  6. Do you maintain adequate limits of liability?
  1. Do you have a central station burglar alarm?
  2. Do you screen all potential employees prior to employment?
  3. Are references required and verified?
  4. Do you lease employees?
  5. Does anyone outside your accounts payable unit confirm the correctness of all invoices that are paid?
  6. Who receives money and keeps the books?
  7. Who disperses money and keep the books?
  8. Who reconciles the bank accounts?
  9. Are independent audits periodically performed?
  10. What is the maximum amount of cash kept on site?
  11. Are all monies and securities kept in a locked safe or other receptacle?
  12. Are all cash registers located in well-lit areas?
  13. Do you use security cameras on all cash registers?
  14. What is the maximum amount of money or securities carried by any one person off premises?
  15. Do salespersons, delivery persons or others collect money?
  16. Do you use the Internet for transactions involving transfer of money, securities or goods?