Risk Management Bulletin

What 2016 New Year resolutions are your making for your company? Consider hiring an internal control consultant to help you reach your goals.

What is an Internal Control Consultant?

As a company insider, you may not be objective about your company’s performance, weaknesses or areas of need. You also may not have the resources or authority necessary to make successful long-term changes.

An internal control consultant will look at your company from the outside and view your situation and needs from an objective point of view. He or she will also walk with you as you implement plans for change.

 

A consultant can help you perform tasks related to: 

• Research and Development
• Information Technology
• Wage and Salary Administration
• Sales and Marketing
• Product Distribution
• Manufacturing
• Financial Planning and Control
• Human Resources Management and Labor Relations
• Administration
• Organizational Planning and Development
• Strategic and Business Planning
• Incentive Compensation

How do you Hire Internal Control Consultant?

Your attorney, accountant or banker may be able to suggest possible consultant’s for your particular business and needs. Check out your trade organization and the Institute of Management Consultants USA for referrals, too.

During the hiring phase, look for candidates who are experienced in handing cases like yours. Their references should back up their track record and experience claims. Additionally, ask if the consultant handles situations with honesty and tact. You also want to find out how well the consultant works with others, if he or she is a team player and whether or not the consultant can build rapport with you and your team.

How Much will an Internal Control Consultant Charge?

The fees for assistance vary based on the task and the consultant’s knowledge, skill and experience. Typically, a consultant whose sole job is advisory in nature will charge a flat fee per hour or job. A consultant who’s doing an extensive project for you will often require a retainer and regular payments throughout the project or as goals are met. Before any specific discussions take place, agree on a fee schedule and get the arrangement in writing.

Accidents can happen in any business environment. Be prepared with a stocked first aid kit. This way, you and everyone in the office can handle emergencies when they arise.

The First Aid Kit Box

Any box or soft bag can hold your first aid supplies. However, consider a container that features the international Red Cross symbol, a white cross on a red background. That way, employees can quickly grab the right box when they respond to an emergency.

Bandages and Gauze

A variety of sterile adhesive bandages and gauze pads handle minor scrapes, burns and cuts. Stock an assortment of sizes along with at least 10 yards each of one-inch-wide cloth tape and four-inch-wide gauze.

Medical Tools

In addition to surgical scissors that cut tape and gauze, stock tweezers, a splint, scalpel and tongue depressors in your first aid kits. Be sure each tool is sterilized and sealed.

Gloves and Masks

Surgical rubber gloves and surgical masks reduce the spread of infection and protect your employees. Stock sealed gloves and masks in the first aid kit.

Medication and Ointments

Several medications and ointments ease pain and reduce infection. They include anti-inflammatory medication, aspirin, antibiotic cream or ointment, burn ointment and antiseptic ointment. You may also consider stocking items medications that combat diarrhea, nasal congestion and sore throats.

Eyewash Station

A portable eyewash station includes sterile supplies that flush chemicals, paint or other materials out of your eyes. Stock portable eyewash supplies with your first aid kit along with your OSHA-recommended permanent station.

Other Supplies

In addition to these supplies, stock a blanket and resuscitation equipment near your first aid kit. These items can be lifesaving as you wait for professional help to arrive.

First Aid Manual

You may be prepared to handle any medical emergency, but your coworkers may not be as skilled in this area. Include a first aid manual in the kits. The first responders may use the manuals as references until trained help arrives.

Emergency Numbers

Near your first aid kit, include emergency numbers for your local medical facilities, fire department and police station. Update the list when a contact number or provider changes.

Other Considerations

To be compliant with OSHA guidelines, take several considerations into account. First, businesses with three employees must stock at least two of every item in their first aid kits. At least one kit should be placed on each floor. Keep accurate records of injuries and illnesses if you employ more than 10 people.

If you dream of being your own boss, maybe you’ve also considered starting your own business. The idea of setting your own hours, working from home and selecting only projects that interest you is appealing. However, According to the U.S. Small Business Administration, up to 50 percent of all small businesses fail within five years. Starting a business includes risks you should understand before you take the plunge.

Starting the Wrong Business

Maybe you want to start a bakery because you like cookies. Are you prepared to bake for several hours every single day? Have you researched the local area to find out how much competition you have and what will set you apart? Do you have potential customers who want the types of cookies you bake? Are your cookies tasty?

Evaluate your personality, skills, education and interests as you decide which business to start. By choosing one you’re passionate about and skilled to do, your chances of staying interested in your work and pushing through despite setbacks increases.

Finances

Owning your own business means you hold the financial responsibility for its success. You could turn to Kickstarter, private loans or investors for start-up capital, but you also need financial smarts to keep your business going.

Financial success starts with a solid business plan. Ask a trusted advisor or a successful business owner from SCORE to assist you in creating a plan that works. Remember to create a growth plan, too, that outlines when you’ll repay debts and reach financial milestones. Finally, keep up with your paperwork so you know how much money you’re spending and making. Successfully complete these steps, and you’re on your way to financial success with your new business.

Family Relationships

Even though you may start a small business in part because you want to be home more, you’ll put in long hours as you establish your business. Working from home also means that your office is easily accessible, and a quick phone call after dinner can easily turn into hours of work.

Be sure your family supports your decision to start a business. Then establish firm office hours that protect your family time as you limit the risk of damaging your family relationships because of your business.

These days, cyber attacks against businesses are a daily occurrence. This crime poses a significant threat to firms that have a “bring your own device” (BYOD) policy, allowing employees to use their personal mobile devices – such as tablets, smartphones, and laptops – for company business.

This eliminates the cost of providing these devices to employees who are away from the office, raises productivity by streamlining the flow of information, and allows real-time employee response to client needs. On the other hand, a BYOD policy creates serious information security risks.

Companies have significantly less control over employees’ devices than over in-office technology – which makes it easier to hack them. More and more workers are storing data from their devices in ‘the cloud” (one study found that among the 89% of young employees who use personal cloud storage, 70% are storing work-related files, while 33% store customer data there). What’s more, according to the FCC, roughly one in three robberies involve mobile phones, and criminals often target laptops and tablets.

The result: it can be easy for hackers and thieves to target corporate data and confidential client information on your employees’ devices, leaving you open to expensive litigation and negative publicity.

To reduce this exposure, risk management experts recommend that your IT department educate employees on the vulnerabilities of their devices and provide the resources to protect them by:

1. Adding auto-locks on all devices that can disable them if stolen.
2. Making sure device are stored in a safe place at all times.
3. Recommending passwords that combine letters, numbers and symbols.

We strongly encourage you to purchase cyber liability insurance as a safety net that can help you prevent hacking and minimize its financial and reputational costs to your company.

To learn more, feel free to get in touch with our risk management specialists at any time.

You set the security alarm every night on your way home. You double-check the window locks and turn the deadbolt on the back door. You place your cash and valuables in the safe. Before turning out the lights, you start the backup routine on your computer. Congratulations! All of these steps help minimize your chance of loss and make you a more effective risk manager. But how do you know that these devices are working properly?

For example, although you’re performing regular backups to your computer, do you double-check to be certain the data is actually there? One systems administrator ran her backup routine every night, only to discover at the time of a systems crash that all backup files for the past six months were blank, due to a hardware malfunction. Have you tested your security alarm lately to make sure that it actually alerts the police or fire department? Are you sure that your safe locks completely when the door is closed? If your employees sometimes close up at night, do they have a checklist that covers every step in the process?

Making your protection devices work as hard as you do is just one of our services. Although many agencies can sell you insurance, we do far more than this. We can help minimize your losses by implementing a comprehensive and effective risk management program that supplements your insurance by providing a “safety net “to catch you. Our philosophy is clear: The best claim is the one that never happens.

If you agree, just give us a call.

Although fire extinguishers are great for putting out small fires – or preventing them from turning into big ones – make sure that yours are ready should the time come. Consider these tips from OSHA:

Be certain the extinguishers are the type required by your fire exposure. The extinguisher to use depends on the type of fire:

• Class A fires involve materials such as wood, paper, or cloth which produce glowing embers or char.
• Class B fires involve flammable gases, liquids, and greases, including gasoline and most hydrocarbon liquids, which must be vaporized for combustion to occur.
• Class C fires involve fires in live electrical equipment or in materials near electrically powered equipment.
• Class D fires involve combustible metals, such as magnesium, zirconium, potassium, and sodium.

Put extinguishers in proper and easily identifiable locations. Locate them along normal paths of entry and exit and make sure that they’re clearly visible. Where you can’t avoid visual obstruction completely, provide directional arrows to indicate the location of extinguishers and signs marked with the extinguisher classification. If devices intended for different classes of fire are located together, mark them conspicuously to ensure that employees choose the proper extinguisher in case of fire.

Keep portable extinguishers fully charged and operable. They should be kept in their designated locations at all times when not being used. When extinguishers are removed for maintenance or testing, provide a fully charged and operable replacement unit.

These tools are valuable only if they’re available and functioning when needed. For more recommendations on keeping your workplace as safe as possible, talk with our risk management professionals. We’re here to help!

Unpaid internships can be a great win-win solution for business looking to attract new talent and students interested in getting some real-world work experience. But unless you’re careful in how you structure and manage your internship program, you could run afoul of labor laws and find yourself facing some hefty fines. The Department of Labor offers this six-point test to make sure your unpaid internship stays on the right side of the law:

• The internship offers experience similar to what would be gained in an educational environment like a traditional class.
• The experience is designed to benefit the intern.
• The intern is not used in place of regular employees, but works under supervision of the staff.
• The intern isn’t necessarily guaranteed, or entitled to, a job at the completion of the internship.
• Both the employer and the intern understand that wages will not be paid during the internship period.
• The employer doesn’t receive any immediate advantage from the intern’s activities; that is, it’s designed for the learning benefit of the intern.

This six-point test generally is applicable even when your internship provides academic credit in exchange for work. If your internship program fails to meet any of these criteria, wage and overtime provisions may apply, which means your company could be sued by the intern and even by the school.

To reduce your business’ risk of litigation, review your internship program to make sure it passes the six-point test as well as any applicable state laws. And to maximize protection, consider formalizing your internship program with the guidance of your human resources department or counsel, developing a description of the program that emphasizes its educational benefits and defines the role of an intern in your company.

An unpaid internship can provide a great opportunity for students to gain applicable knowledge and an understanding of their chosen field. Taking a few simple preventive steps helps ensure your company can continue to provide learning opportunities as well as an enriching experience for students.

ERM, or enterprise risk management, has become increasingly popular in recent years as businesses of all sizes have embraced the comprehensive approach that involves continual input aimed at managing all risks faced by a company. But before you can develop strategies to address emerging risks, you need to build a framework that can provide your company with an overall assessment of its risks and its risk level.

When building an ERM framework for your company, think of it as a powerful viewing platform that lets your business gain an overall appreciation for the risks that must be addressed throughout the entire company. Not sure how to begin? Here are a few guidelines to get your started:

Appoint a steering committee.
Establishing a committee to oversee the entire process will help your company stay focused on the end goal and it will also help avoid duplication of effort that can wind up costing time and money.

Assign responsibilities.
Assign the roles and responsibilities of all the key players who will contribute to your ERM plan. To avoid confusion, roles and responsibilities should be clearly defined and written down for review and reference.

Identify risks and prioritize them.
Ask for input from all your ERM participants to determine which risks are most pressing, and decide the order in which every risk should be addressed before developing mitigation plans.

Design plans to monitor and report actions and results.
Unless you track your results and outcomes, you won’t know what’s working and what’s not. Have a system in place for regular reporting so all team members can be held accountable.

ERM is a dynamic and ongoing process designed to evolve with your business. To ensure the best outcomes for your business, reviewing your ERM program should be a continuous event that involves stakeholders from all levels. Yes, it’s work — but it can provide tremendous benefits.

Safety consciousness tends to slip over time – and it’s your responsibility to make sure that this doesn’t happen. A well-prepared and well-executed safety audit/inspection program can play a key role in your risk management by uncovering conditions and work practices that could lead to job accidents and industrial illnesses.

Stated more positively, this means checking to see that things are in good shape. In addition to help preventing accidents, the inspection program will keep management informed about the “safety status” of your organization, provide a consistent method of recording observations, and reduce the possibility of important items being overlooked.

Safety inspection tours are like preventive maintenance. Every piece of equipment wears down and deteriorates sooner or later, and needs to be checked. Similarly, employee work procedures fall into routines – some of them unsafe – over time, which means that you need to evaluate them at regular intervals.

Safety inspections have a number of objectives:

• Spotlighting unsafe conditions and equipment.
• Focusing on unsafe work practices or behavior trends before they lead to injuries.
• Uncovering the need for new safeguards.
• Getting all employees to buy in to the safety program.
• Re-evaluating the safety standards of the organization.
• Comparing safety results against safety plans.
• Gauging the relative success of safety training efforts.
• Anticipating problems in advance of any OSHA inspection.

Our agency’s risk management professionals would be happy to work with you on developing and implementing a comprehensive safety inspection program for your business. Feel free to get in touch with us at any time.

Chances are that you outsource most risk management functions to an insurance company representative or agent.
However, to protect your business against the risks you face at a price you can afford, you need to control the presentation of your loss and coverage information to insurers. In other words, it makes sense to provide what an underwriter needs to write your business: a “risk profile” that shows a historic record of your exposures, loss data, and insurance contracts.

Your profile should include these items:

• A history of the firm that’s positive and realistic. The more effectively you’ve adapted to the recession, the better your chances of getting a competitive rate.
• Resumes of key management— to show that you and your team know your business.
• Marketing materials and Web page(s).
• A D&B Report. Without one, you might get a lower grading. If you’ve had financial problems, some insurance companies might be willing to write your business, as long as you provide this information upfront.
• Audited financial statements, if applicable.
• Estimated values, including sales, workers compensation payroll, automobile fleet, property and equipment.
• Sales and payrolls for the past five years.
• Insurance loss runs and claim runs during the past five years for all policies, valued within 90 days of renewal.
• An outline of your workplace safety plan(s).
• Fleet maintenance schedules, if applicable.
• Your workers compensation experience modification factor.

Be sure to review all data on your company in the files of your insurance company and add it to your database.

Maintaining a comprehensive, accurate, and updated risk profile, and staying on top of how you present this information, will play a key role in securing a comprehensive and cost-effective insurance program.

Our risk management specialists stand ready to offer their advice at any time.