Welcome to the Wisconsin State Crime Stoppers, Inc. Web Site!

From Our President,
K. Scott Abrams, CPA, CGMA

                                

President’s Message                                                                                                               K. Scott Abrams, CPA, CGMA

 

Risk Management

 

Okay, many from our local Crime Stoppers programs may not know what ‘risk management’ means per se, however, it is very important to understand and implement in your local programs, particularly if you engage in any fund raising events that may include public functions or gatherings. 

 

From a business perspective, risk management can be defined as:

-          The identification, assessment and prioritization of potential organizational risks; and,

-          Undertaking a coordinated and economical application of resources to minimize, monitor and control the probability and potential impact of unfortunate events.

 

The overall objective of a risk management plan is to assure that uncertainly does not deflect or impair an organization’s endeavors and business goals.  Perhaps putting it into a more personal perspective may assist with understanding the elements of risk and how to manage it.

 

For us, living in Wisconsin has many elements of inherent risk during the wintertime. For example, I just came in from shoveling the snow from my driveway and sidewalks. Even though I take good care in the snow removal process, apply some salt where there may be some slippery spots, I may still be at risk. Let’s say my neighbor comes over and delivers some of her wonderful chocolate chip cookies that she has baked especially for me. Unfortunately, while carrying the box of cookies in front of her she may not see an icy spot on the sidewalk located on my property, slips and falls, and breaks her arm.  Since she slipped and fell on my property, and even though I had taken steps to remediate the snow and ice from my property, I am at risk for the bodily injury she suffered and may be responsible for any damages she incurs.

 

How do we mitigate this risk? Of course, any homeowner knows that they acquire homeowners insurance to cover this type of potential risk or injury. So in the simple sense, each home owner identifies and prioritizes a potential property risk, and then consider undertaking a coordinated approach in controlling any unfortunate event, as we defined in the definition above for risk management.

 

Now we can take this knowledge from our own homeowners experience and apply it to our Crime Stoppers organizations. Many of our Crime Stopper programs undertake fundraising events such as golf outings, gala events, chili cookoffs, etc., and each one of those has an element of risk where injury could occur, through no fault of the organization’s efforts or at the venue in which the event is undertaken.

 

An organization may look at which risk management option is most appropriate for its program.  Traditionally, most businesses and organizations want to transfer this type of risk to an external agency such as an insurance company.  In some cases, some local programs may go bare and acquire no insurance coverage at all, however, knowing that the organization needs to realize that they may be putting its entire organization’s assets completely at risk.  Also a part of evaluating organizational risk options may look at avoiding risks altogether, which may require eliminating a particular event or activity. Finally, it is important to periodically review the risk management process annually in case some new events or activities have been modified, added or deleted that may impact insurance coverage.

If you take the traditional route and consider acquiring general liability coverage for your organization, make sure it meets the programs needs in terms of what events are taking place. For example, based on state/county laws, if alcohol is served to participants at an event, you may need to consider having dram shop coverage.  As a Crime Stoppers USA member, your organization may obtain discounted insurance coverage for lawsuits resulting from bodily injury and property damage through Marsh Insurance. You can find out more about this discounted insurance product on the Crime Stoppers USA website under the menu item ‘Resources’, or go directly to this website address: http://www.crimestoppersusa.org/insurance.   

 

This is just one of the basic risk management areas your organization should consider. In our next issue, we’ll discuss in more detail the Directors and Officers insurance liability coverage.