Human Resource Management– A Fresh Look

To run a successful business it is necessary to effectively mange your risks through a combination of solid process and procedures as well as insurance products. I recently have made the change of providing Human Resource consulting services to providing insurance solutions to clients. Going from a consumer of commercial insurance products to a provider of those same products has provided some interesting insights.

Human Resource departments or consultants often manage risks through creating and implementing effective procedures and training. Hiring practices, training and solid management practices can reduce but not eliminate many of the inherent liabilities of a business. Optional insurance products are needed in order to complete the solution.

An example of this is when HR creates solid hiring practices, provides non-harassment/non-discrimination training to managers and utilizes a complete and up to date employee handbook. These best practices help to mitigate the exposures of wrongful termination, harassment and discrimination. In conjunction with these preventative actions, Employment Practices Liability (EPL) insurance can create a complete risk management solution.

Conversely- insurance companies will require that certain HR procedures and business practices are in place prior to providing a company with a policy. For example, without the above mentioned best practices, insurance companies may decline to place an EPL policy with that company. It is clear that a holistic approach to risk management is the best solution for business.

Having recently made the change from business consultant to insurance consultant there are a number of similarities:

• -The need to listen and understand a client’s current knowledge and perceptions of the subject.
• -The importance of creating an open dialogue and understanding the business goals of the client.
• -Integrity and trust must be established and maintained for an effective relationship.
• -Business owners want to protect what they have built and see value in a consultative approach to achieving that.
• -Price is always an issue- but there is always something more important.

Insurance provides both property and human insurance; direct and indirect coverage and can be confusing to understand. One of the roles of an agent is to determine how much education is needed/ wanted and provide the correct amount of information. Insurance agents have an opportunity to be a great resource to determine the level of risk that is comfortable for each customer and build a solution which matches that specific tolerance. It is clear that a knowledgeable insurance agent should be a key part of any business’s team of trusted advisors.

Tony Johnson is an Accredited Advisor in Insurance and can be reached at Davidson Insurance, 360-514-9550 or Tony [at] Davidsoninsurance [dot] com