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FAQ's on risk managment

We hope that you will find the answers to these questions helpful.
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What is "Risk Management"?

Risk management is the process of identifying threats to life and property, then taking steps to prevent the threat from becoming reality and to minimize the negative impact of events that do occur.
For example, on a personal level you know that there is a possibility that riding in a car can result in injury or death. To minimize the chance of an accident, you can take a driver training course, purchase a car whose design includes great safety features and always wear your seat belt. By taking these steps, you have effectively a) improved your skill at driving and avoiding accidents and b) reduced the severity of any injury that may occur if you are involved in an accident.
You should to also plan how to pay for losses. Many people have ‘rainy day funds’ to pay unexpected costs – minor damage to their car, for example. In addition, they carry automobile insurance for damage more serious than they can pay out of weekly income. Businesses can also set aside funds to pay for unexpected costs up to a predetermined limit, then purchase insurance for more expensive losses and also access funding options that include risk transfer, captive insurers, reciprocals or pooling arrangements to handle high-cost losses.

What is the difference between ‘risk management’ and ‘enterprise risk management’?

Enterprise risk management (ERM) goes beyond standard risk operational management assessments to include risks related to all types of accidental losses to include financial, strategic, operational, personnel, reputational, and other risks.

What is a ‘Risk Management Policy Statement’? Why should we have one?
These statements are your organization’s statement that describes its philosophy and goals on risk management. This statement should clearly outline what responsibilities and authority reside in the risk management’s area. Cunnart can help you develop a risk management policy statement that focuses on your stakeholders key needs.
Where in the corporation should responsibility for implementing the risk management program lie?
These statements are your organization’s statement that describes its philosophy and goals on risk management. This statement should clearly outline what responsibilities and authority reside in the risk management’s area. Cunnart can help you develop a risk management policy statement that focuses on your stakeholders key needs.
What are the steps involved in developing a risk management program?

The risk management process is based on a series of steps. Analysts may need to consider several risks that interconnect simultaneously.
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How should we begin our organization’s Enterprise Risk Management (ERM) program?

ERM is slowly rolling out into a wide number of organization organizations. It can be a time-consuming and costly exercise. Initially, managers need to assess the amount of time and resources they are willing to expend. Is your intent to identify every single risk that your organization faces – or do you intend to begin with the most critical risks then gradually take on lesser risks as time and resources permit? Employees and volunteers at all levels of the organization can effectively identify and manage risks in their area.
Some people recommend the ‘entire risk’ approach.  While this is an admirable goal, not every organization can make this commitment. 

A key to implementing and sustaining an ERM culture is to ensure effective communication and buy-in of the initiative at all levels of the organization
How often will we have to conduct a (enterprise) risk management analysis?
To stay up to date, risks should be regularly evaluated, then mitigated, monitored or removed from the risk inventory. A risk inventory (log) enables a risk review relatively easily by updating the list. It may also help you identify new risks.  There are many options for developing data bases for risk inventories however you can begin with a simple spreadsheet.
How do we begin a corporate risk assessment?
Begin developing the inventory by answering three questions about all aspects of your operations:
1) What could possibly go wrong?  Add them to your inventory
2) How likely is it that those potential problems will occur?
3) If they do occur, how bad is it likely to be?  Financially? Negative Publicity? Effect on customer service delivery? Effect on lives of citizens, visitors and employees?
What do we need to consider when developing the inventory and assessing risks?
It is especially important to ensure that all participants need to have a common understanding of key terms.
  1. What is meant by ‘risk’?
  2. How will we measure the likelihood and potential for losses to occur?
How to rate each risk from a corporate – not departmental – perspective.
Is it necessary to hire a consultant to undertake a detailed risk assessment?
In most cases, your staff can do the assessment with the help of a qualified facilitator to assist and assist with the process. Occasionally outside technical expertise may be advisable if the risks are very complex.
What is the best way to undertake a Risk Management Assessment
There is no single method of identifying and evaluating risks. It is important though to regularly review and update your organization’s risk inventory. Often it is easier to do this by focusing on one area/department at a time while recognizing that where a task overlaps with another department requires logging and managing that connection. For example, you could include workers with technical knowledge in the job functions under review, a health and safety technician plus someone with an ‘outsiders’ perspective.
Engaging a project facilitator with risk management experience is a useful way to ensure that key issues are considered and that all participants have an opportunity to be actively involved in the review. Experience in facilitating numerous risk assessments of public services.
It seems that implementing an ERM will be very expensive. Will the benefits outweigh the costs?
ERM (and RM) programs have many benefits.  A few of these benefits are:
  • Provides valuable support for strategic objectives
  • Builds risk-awareness across the organization
  • Enhances management’s ability to assess and take on suitable opportunities
  • Improves corporate knowledge - leading to enhanced decision-making
  • Reduces operational (unpleasant) surprises and losses
  • Improves business continuity – delivery of key customer services
  • Provides a basis for assessing  risk v. return with strategic objectives
  • Improves departmental communications by drawing on the expertise of highly skilled workers through the corporation.
Why should we include opportunities in risk assessments? I thought all risk was negative.
Historically "risk" was seen as only a negative event, Today’s risk managers use the RM/ERM process evaluate opportunities too. This ensures that an opportunity is evaluated on a “risk or reward” continuum to improve the likelihood that an opportunity will result in a net benefit to the corporation.
How important is it to have a risk management committee?
Organizations that employ full-time, professional risk managers often have a corporate risk management committee that meets infrequently to assess emerging, or changing, risks. This Committee can effectively identify the organization's evolving risks, plus analyze and prioritize those risks from a corporate-wide perspective. Knowledgeable, interested committee members are often effective resources to the risk manager due to their in-depth knowledge of day-to-day operations. The members provide a broad view of the organization’s risks and enhance the committee’s problem solving opportunities.
Where does insurance fit into the Risk Management program?
Traditionally, risk managers were seen as ‘insurance buyers’. While insurance remain provides important financial protection, risk managers today emphasize the need to prevent chances of unintentional  loss costs plus  other related negative from unintended acts or omissions. Insurance provides funds that protect the organization from financial catastrophe, but that protection is limited to the conditions of the insurance policies purchased. (There are no All Risk’ policies that exist without exclusions.)
How can Risk Management training benefit our organization?
Often the day-to-day difficulties of administering a public entity leads to sound risk management practices being seen as something too time consuming to deal with.
One way to see your risk management program is in the same was as you do health and safety processes; it’s not just another chore; it’s a ‘best practices’ way to do your work. Workplace safety practices reduce employment-related injuries/costs, risk management practices reduce the chance of costly loss of assets or injuries to non-employees affected by your operations.
We access webinars from our insurer and professional associations. Why shouldn’t we just continue using these?
Webinars are a low cost option that is useful for learning relatively simple concepts and for refresher training. Avoiding the costs involved in travel, accommodation, meals, and loss of productive time in the workplace is the key advantage to this training method.
However, webinars lack the face-to-face contact with a trainer and colleagues that enhances the learning process.  Webinars can lead to frustration as seminar design necessitates transfer of more basic knowledge with less focus on specific needs of the students.
Our insurer offers risk management training; Why should we hire someone else?
Many agents, brokers and insurers offer seminars for clients and prospective clients at no cost. While these programs have merit, keep in mind that the provider’s primary business is to insurance products and advice. Their speakers may provide useful information however it is likely to be biased towards the benefits of their products and to encourage you to buy more, or more types of, insurance products. Their underlying agenda is to keep and retain your business while providing suggestions that will minimize risk – often slanted towards insurable risk. Qualified risk management professionals are trained to identify all risks – not just insurable ones. As a result, their goal is to develop practical, low-cost solutions to solve your complex risk management needs.
Most people inherently view recommendations with skepticism when the recommendations are made by someone with something to gain from it. Also, if employees’ see the party making recommendations has an insufficient understanding of your day-to-day risks they are less likely to embrace the recommendations flowing from the risks evaluation.


What guarantee is there that training staff in risk management practices will lead to a reduction in the cost of risk?
There are no guarantees that training of any kind will show a direct reduction in costs. It is impossible to measure costs that are not incurred. Effective risk management efforts will eventually pay off with fewer losses – leading to lower risk-related costs and more competitive insurance premiums.
Why shouldn’t we just purchase an on-line training program?
While there are many on-line programs available; most are not designed for public entities. On-line programs are a good tool for introducing and refreshing simple concepts and information. However, users are unable to learn interact with the trainer and colleagues, to ask questions specific to their interests or to debate pros/cons of various perspectives.
Is there a volume discount if we buy Cunnart’s materials in bulk?
Bulk discounts are available on all purchases of printed products beginning at 15 copies. Please contact joy@cunnart.com to discuss your needs.
What should I look for when choosing a Risk Management trainer/coach?
In any specialty, the first indication of a person’s skills is their qualifications and experience. Look for a commitment to specialized education - a Risk Fellow (RF) diploma. This signifies the effort to learn basic risk management techniques. A person with a diploma in insurance and risk management has completed more than 15 business management and technical insurance courses.
Always select your trainer, coach or consultant based on their professional qualifications, overall knowledge and practical experience in risk management and training.
Does Cunnart offer an independent insurance review?
Cunnart provides coaching, training and risk management services Insurance is only one part of the overall risk management process. There are often questions raised when discussing risk management programs. Insurance programs are discussed in general terms; however we suggest that an insurance consultant be contacted for specific insurance-related recommendations and advice.
How is Cunnart compensated for its services?
Training programs are priced according to the level of specialization of the training or other program, plus expenses. Resource materials are provided are available for student to use as refresher material. Multiple days of training in one location, and the publications available obtain preferential pricing during the program.
What does ‘Cunnart’ mean?
The word ‘cunnart’ is from the Highland Gaelic language. The word is composed of two parts: cun – a time, plus hairt – danger or risk. I.e. a time of danger or risk. Pronunciation: “Cun – hairt”