Mike Arnold, Account Executive with The Partners Group Commercial Insurance Division, recently presented on Insurance & Risk Management at Educational Conference in San Diego, California.
This article covers three key areas to help pharmacies improve their processes and procedures to prevent the chance of loss, and increase their understanding of how their insurance policies can be applied in an adverse event.
- Insurance & risk management terminology that is important to recognize
- Laws that protect pharmacies against PBM (Pharmacy Benefit Management) abuses
- Key insurance coverage to be aware or for adverse events
The Importance of a Risk Management Strategy
Developing a risk management strategy is important because it decreases the chance of loss, plus reduces the severity. Understanding your exposures will help you run your business and be able to monitor your risk more effectively. Insurance should be a part of your risk management strategy, it can protect you from extreme financial loss.
Two Types of Risk
The first step to monitoring your risk is to know the two types of risk: Pure Risk – situations that present the opportunity for loss but no opportunity for gain (generally insurable), and Speculative Risk – uncertainty about an event under consideration that could produce either a profit or a loss (gambling, business transaction).
There is risk in business.
Risk appetite is the amount and type of risk that an organization is prepared to seek, accept or tolerate. Risk tolerance is the organization’s readiness to bear risk in order to achieve its objectives.
Risk management is defined by Udemy as as the identification, assessment and prioritization of risks (positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of negative events or to maximize the realization of opportunities.
Implementation of Risk Management Strategy:
- Identifying Risks – make list of all risks. (Best done through brainstorming with team)
- Assessing Risk – analyze and prioritizing risks and create action plan
- Controlling/Mitigating Risk – Implementing strategy (Risk Avoidance, Risk Transfer, Risk Acceptance)
- Reviewing Controls – Regularly review the identified risks, identify new risks, remove irrelevant risks
Insurance will protect you from extreme financial loss. Insurance is defined by the International Risk Management Institute as “a contractual relationship that exists when one party (the insurer) for a consideration (the premium) agrees to reimburse another party (the insured) for loss to a specified subject (the risk) caused by designated contingencies (hazards or perils).”
View the presentation slides to see common questions you should discuss while acquiring property insurance, liability, business auto, workers comp, umbrella excess liability and surety (bond). Also in the presentation are case studies and tips on what to look for in your business insurance policy.
Educational Conference is a 3-in-1 conference that brings the pharmacy profession together in San Diego, California. The American College of Apothecaries (ACA), the International Academy of Compounding Pharmacists (IACP) and the American College of Veterinary Pharmacists (ACVP) joined forces to offer a robust range of programming.
About the Presenter:
Mike Arnold, Account Executive with The Partners Group Commercial Insurance Division.
The Commercial Insurance Division of The Partners Group caters to the unique needs of our clients, with the wide variety of services we offer along with the fully integrated options we bring to help address risk management issues. Our people also distinguish us with their unusual ability to connect on a personal level, while focusing on a problem-solving approach.