November 25, 2014 | Industry Insights

Turn Vague Risk Concepts into Actionable Plans

Share This:

Turn Vague Risk Concepts into Actionable PlansTurn Vague Risk Concepts into Actionable Plans

Often we hear of risk management plans, but that broad concept can produce vague, theoretical documents that are filed away and overtaken by operational events. Instead of wasting time and money on an unused document, why not create a clear, actionable plan?

The U.S. Customs and Border Protection Agency’s recent Five-Step Risk Assessment highlights the three main components that of a quality loss-reduction effort.

  • Risk Assessment
  • Threat Assessment
  • Vulnerabilities Assessment

By strengthening these three legs of your loss-control program, all companies in the shipping business can design and implement measures to reduce losses from crime, catastrophes, unrest, delays, regulatory errors and financial problems, to name a few.

A risk assessment looks at external threats to a company that can be protected against by some kind of process or technological improvement. That could include better training, a workflow change, negotiations with business partners, improving written policies, simplifying forms or boosting security, for example. It is the overarching evaluation of two subcomponents—threats and vulnerabilities—and it supposes that you will use accurate data from external sources and internal audits or reviews.

A threat assessment identifies external threats to your shipping business—those could be geographic challenges (weather, terrain, etc.), demographic problems (crime, corruption, civil unrest, strikes, health scares, e.g.), political issues (change in leadership, regulations, trade disputes/sanctions), financial instability (partners, banks, your own), or mechanical (truck breakdowns, train derailments, refrigeration failures, etc.). There are, of course, others depending on your industry, and you can and should get very specialized in your evaluation of threats, since any one could cause a serious property loss, business interruption or liability claim against you.

A vulnerability assessment is a review of your internal weaknesses that could lead to a loss. Typically, companies should look at their internal security procedures, supply chain management and agreements, workflow processes, training, credit/financial strength, hiring and firing practices, accounting methods, data protection and backup, fleet maintenance, and compliance efforts—though this is just a partial list.

There are many, many companies that can help you develop a quantitative assessment that is statistically valid, but even getting started by coming up with a list of threats and vulnerabilities as well as data resources or needed audits/surveys to develop data pools is a movement in the right direction. You might be surprised how many issues you identify that you have never planned around. You might even have one of those “aha!” moments, spotting an underlying cause of loss that you had not noticed before.

Once you’ve made your initial list, it will be important to segregate problems by priority or importance. Items can qualify as priority based on their frequency, their likelihood, or their potential (or actual) loss-cost. Your insurance broker is an especially good person to involve at this point since he can provide solid information on how your policy coverage plays in to your risk of loss. At Roanoke Trade, we offer risk management services alongside insurance protection for the shipping industry as part of a complete suite of loss mitigation programs.

We invite you to learn more about us, our experienced talent in this highly specialized area, our creative solutions, and the value we will bring to you and your clients. Please contact us at 1-800-ROANOKE.

Source: C-TPAT

Share This:

Related


We are pleased to announce Karen Rzeszutko has been named President of Roanoke Insurance Group, effective August 1, 2023!

Karen has been a part of Roanoke for nearly 20 years. During this time, she has shown exceptional leadership skills and technical expertise in multiple customer-facing positions, such as Head of Marine & Liability Underwriting and Head of Liability Claims. Her most recent role was SVP, Chief Underwriting Officer, Marine at Munich Re Specialty Group […]

Industry Insights

Reduce the Increasing Rate of Rail Thefts

Situation  In Q4, BSI recorded a significant uptick in rail thefts in North America, especially in the United States, in the Los Angeles area along trail lines, and near the port.  In Q4, the rail modality accounted for 6.7 percent of recorded cargo theft incidents in the United States. While this is a significant jump […]

Cargo Insurance, Industry Insights, Shippers Interest Cargo Insurance, Trade, Transportation

Roanoke Appoints a New Regional Vice President and Head of Sales

Roanoke has appointed two key leaders to new roles, effective November 1, 2023. Please join us in congratulating Patrice Lafayette for accepting the position of Regional Vice President, Western Region, and Grant Goldsmith, who has accepted a position as Head of Sales. Patrice has been a steadfast leader of Roanoke’s Western Region for more than […]

Industry Insights

Sign up for our latest articles and events.

Roanoke is the leading provider of insurance and surety solutions for transportation and logistics providers. In fact, we are recognized as the most reliable source for U.S. customs bonds.

Contact

If you have any questions or need help, feel free to contact with our team.

800-762-6653

US CORPORATE HEADQUARTERS

1501 E. Woodfield Road

Suite 400W

Schaumburg, IL 60173


CANADA CORPORATE HEADQUARTERS

390 Bay Street

Munich Re Centre, 22nd Floor

Toronto, ON M5H 2Y2

Solutions that Go the Distance.

© 2024 Roanoke Insurance Group Inc. A Munich Re company

Better Business Bureau logoCoverholder at Lloyd's logo