You may find lots of gobbledygook written by some insurance companies, designed to baffle, then persuade. We like to at least try to keep things simple and clear to understand. In simple terms, what we do is deal with the risks that concern you or your business. You pay a premium, the insurer takes responsibility for (or indemnifies you) for the potential losses which you can submit a claim for in the event of a loss or damage. It is obviously really quite important that between us we understand the relevant risks and deal with them effectively and at reasonable cost.

So, how do we categorise the various risks?

Pure risk is a risk where there is only a possibility of loss or of no loss – there is no possibility of gain. Pure risks can simply be categorised as personal, property or legal risk.

Speculative risk is different from pure risk because there is the possibility of profit or a loss. This is the case with most financial investments. The majority of speculative risks are uninsurable, as they are undertaken with the hope of profit.

Pure risk

Personal risks affect someone directly, such as illness, disability or death. Property risk affects real property; like an office fire or car theft. A property loss can be both a direct loss (damage to the property itself) or indirect loss or consequential loss (a loss created by the direct loss, such as business interruption after a shop fire). Legal risk, or liability risk, is a risk that causes you to be sued because of malpractice, neglect or causing wilful injury or damage to someone or their property. You can also insure the cost of defending yourself, even if you are not found liable.

Once we have fully understood the risks that concern you, there are a number of ways of dealing with or managing them. Insurance obviously is one, but there are others that can replace or work in conjunction with insurance. At aQmen we can also help and advise on avoidance, loss control, retention and noninsurance transfers.

Very briefly, a word or two on each of these ……..

Avoidance is simply the elimination of risk. In very simple terms (and we don’t mean to be disingenuous or flippant here but perhaps to get a point across), to avoid the risk of car trouble, don’t own a car!

Loss control works by either loss prevention or loss reduction. We help identify factors that increase the likelihood of a loss and minimise or nullify their effect; driving slower is a simple illustration continuing the first example. Good loss control can help reduce the cost of insurance.

Risk retention is handling the risk internally, either because insurance cannot be purchased or is too expensive, or because, simply, it makes good commercial sense. An insurance excess sometimes called a deductible is a good example of risk retention.

Self insured captives go a stage further, and we can advise, set up and manage structures that allow a business or group of businesses to insure themselves. This may seem extreme, but for the larger organisations it can make sense.

Finally, non insurance transfers reassign risk by using a contract, by hedging or by incorporating; for example a “hold harmless” agreement means that one party agrees not to hold the other responsible for certain acts or under certain circumstances (like acts of God, events beyond the control of the parties, unforeseen circumstances etc) which can then limit the liability of the party to which it applies.

So if you knew all of the stuff we’ve just said, then do you want a job? And if you’re more focussed on Employers Public Liability insurance, Trustees Indemnity insurance and other buzz phrases then we can talk that sort of language too, and some, but hopefully elements of what we have said helps clarify the insurance world just a little bit.

In summary, risk and dealing with it is what aQmen is all about and we have the expertise, knowledge, innovative approach (and the grey hairs) that ensures our clients can sleep at night.