Economic growth spurs shift in corporate risk profiles: Advisen

As the economy slowly recovers, businesses need to be aware of how an up tick in activity can alter there risk profiles, cautions Advisen.
In its report, Managing Risk Through the Economic Recovery, Advisen identifies areas where critical changes to a company’s risk profile can occur. These include:
• workers compensation claims can surge as companies add less-experienced workers;
• the likelihood of lawsuits caused by employee errors rises;
• temporary workers may trigger liability claims that are not covered under most insurance policies;
• companies are more likely to be charged with labour law violations; and
• as merger and acquisition activity picks up, the probability that company directors will be sued by shareholders increases.
“Greater [economic] activity naturally means more claims,” said Dave Bradford, Advisen’s executive vice president. “For example, more trucks driving more miles inevitably results in more accidents. But, more importantly, risk profiles can change disproportionately in many areas as business activity increases.”
Bradford suggests that companies should not let growth overwhelm prudent risk management.
“By understanding where within their organizations exposures are likely to increase, business owners and managers can take steps to keep risk in check without dampering growth.”