Like many other industries, manufacturing is facing a challenging time due to the COVID-19 crisis and associated lockdowns. With many facing restrictions on cashflow and liquidity, having a better understanding of the risks being faced is essential.
Many businesses have been focusing on understanding their insurance costs as the measure for quantifying their risk exposures — but this does not take into considerations the true cost of risk.
Total Cost of Risk (TCoR) is the sum of direct and indirect costs your company is exposed to when understanding risks. This includes the following:
It is increasingly important to perform a thorough evaluation of your business’s insurance and risk management processes. Whilst this process may sound complicated, it can be simplified with an organisational assessment checklist. This will give you a better understudying of where your company stands with regard to its total cost of risk, helping you decide what your next steps should be.
With the still looming pandemic, it has never been more important to protect liquidity and cashflow, and understanding your TCoR can aid in this. The restrictions and challenges brought about by COVID-19 will continue to test the best insurance and risk management strategies. Looking at your TCoR will ensure you are utilising your risk and insurance costs in the most efficient way.
Benchmarking your risk costs against similar companies and evaluating where you stand is the first step to unlocking possibility. Our checklist provides you with a guide to addressing your risk exposures and the next steps to navigate through your risk landscape.