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Risk Management

There are basic rules and treatment that can and should be used in Insurance Management.

  1. Don’t risk more than you can afford to lose.
  2. Consider the odds.
  3. Don’t risk a lot for a little.

Risk can be controlled by avoidance of the perils and reduction of exposure due to the peril.  If risk must be assumed the exposure must be financed by some mechanism or tool.  Small affordable risk can be assumed, if there is high frequency steps can be taken to reduce the frequency and reduce the severity.  Small risks with low frequency become another cost of doing business.  High severity risk at a high frequency of occurrence is difficult.  Avoidance of the risk and reducing the severity are the only practical approaches, these situations don’t lend well to transfer to an insurance company.  High severity, low frequency risk are most commonly assumed by insurors.

It is essential to transfer large losses that could result in bankruptcy to an insurer, losses that would result in a need to borrow would be important to transfer, losses that can be met out of cash flow can often be assumed by a business.

First Insurance has a number of approaches to properly evaluate risk management.  Initially we would provide a comprehensive analysis of your business exposures for all lines of insurance.  This would include property evaluations, liability exposures from your premises, operations, products, and transportation.  In addition we would review your current workers compensation exposures including classification of payrolls, loss history (including reserves for open claims) and experience modification calculation.  This would include an analysis of the use of deductibles for your workers compensation medical claims.  We will also determine if a form of management liability insurance or employment practices liability are appropriate During this process we want to establish your tolerance for risk and your financial capabilities and desire to assume risk.

At the conclusion of our analysis we will submit your information to the insurance companies we think are most suited to provide your coverage.  A detailed proposal will be presented for your consideration.


Email These Agents Directly:
Casey Callanan, Kelly Draheim, John Moran, Tel Pappajohn
CALL 1-800-247-0713 for an Agent NOW!

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1st Insurance Agency | 20 East State Street Mason City, Iowa 50402-1448
Telephone: 641.421.8000 | Toll Free: 1.800.247.0713 | Fax: 641.421.1940
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