Understanding risk management is as essential to small firms as it is to larger ones according to Thomas Miller.
Lee Tricker, director of Thomas Miller, which specialises in the management of mutual, captive and other specialist insurance companies, warned smaller firms that they would have a lower recovery rate than large firms and so needed to appreciate the importance of effective risk management.
Mr Tricker acknowledged that in some cases for smaller businesses it would not be a cost-effective approach to appoint a dedicated risk manager but he went on to emphasise that it would depend from business to business.
"We've seen businesses that are quite big that don't have a risk manager and probably should have. And we've seen businesses that are quite small and still probably should have a risk manager if they haven't got one," he recounted.
He went on to reiterate the consequences that could occur if the necessary consideration was not paid to risk management, stating that "it could be potentially disastrous."
Only 53 per cent of UK businesses have a formal mechanism in place in terms of succession planning. Although higher than the global and EU averages of 50 per cent and 41 per cent respectively, it still means that almost half of businesses remain inadequately prepared in this area.
