Risk Management. Can Risk Be Managed? 18 th April 2013

Transcription

1 Risk Management Can Risk Be Managed? 18 th April 2013

2 Lcktn LLP Prud Partner t CICES Chris Lennn Head f Office & Senir Vice President fr Lcktn Cmpanies LLP Chris heads up Lcktn s Bristl ffice, having previusly held senir psitins with HSBC and Twergate insurance brkers. With 15 years experience in insurance brking, Chris has specialist knwledge f brking Cmmercial Insurances. He has a particular interest in mre cmplex risk appraisals and reviewing Crprate Risk Prtflis. Chris Lennn Head f Office Lcktn Cmpanies LLP Tel: +44(0) Nrth Quay, Temple Back Bristl, BS1 6FL [email protected] 2

3 Risk Management What Is It? Definitin: Risk Management is the identificatin, assessment, and priritizatin f risks (defined in ISO as the effect f uncertainty n bjectives, whether psitive r negative) fllwed by crdinated and ecnmical applicatin f resurces t minimize, mnitr, and cntrl the prbability and/r impact f unfrtunate events r t maximize the realizatin f pprtunities. 3

4 What Des Risk Management Lk Like? Identificatin f risk Planning the prcess. Mapping ut the fllwing: 1. the scial scpe f risk management 2. the identity and bjectives f stakehlders 3. the basis upn which risks will be evaluated, cnstraints. Defining a framewrk fr the activity and an agenda fr identificatin. Develping an analysis f risks invlved in the prcess. Mitigatin r Slutin f risks using available technlgical, human and rganizatinal resurces. 4

5 Where Applied Physical Securities Lcks, Alarms, Perimeter fencing, CCTV, Guarding etc Fire Suppressins Alarms, Evac prcedures, FEA s, Training BCP/DCP Testing & Cntingencies Data Back-up, VPN s, Clud, Anti-Virus, UPS, C-lcatin Operatinal Staff Training, PPE Issue, Tl-Bx Talks, UGS Investigatin, Use f Plant/Machinery, Wrkstatins, Staff Recruitment & Inductin, Emplyment law Financial Mney laundering, Misapprpriatin f Funds, Tax, Inslvency & Credit Risk, FX 5

6 Can Risk Really Be Managed? Risk is inherent in everything we d. It is present every time we interact with peple and in every area f business we transact. Risk can be managed n mre than time can. What is imprtant is that we are aware f the risk and aware f what can be cntrlled and what can be transferred. 6

7 S What Des Risk Management Lk Like, Really? Frm Filling? We are enduring a perid f legislative review, the fllwing are all recent examples Risk Assessments Undergrund Services Investigatins/questinnaires Permits T Wrk PPE Issue & Recrding RIDDOR COSHH Wrking Time Regulatins Wrking At Height Regs Fire Risk Assessments Asbests Surveys AWR & Emplyee Discriminatin Aut-Enrlment 7

8 Evlving Risk: As technlgy and cmmerce change and evlve s d the risks we face. Tday in business, we need t be mindful f expsure t lss and allegatins f wrng ding in every facet f ur business Cyber/IT Risks Data Prtectin Financial Crime 8

9 Risk Cntrl Getting Ducks In A Rw System Cmpliance Emplyment Prcedures & Dcuments Risk Assessments Permits T Wrk Cntractual respnsibility Hld harmless/subrgatin waivers Cmmn duty hlders Fire preventin and suppressin Physical Security IP & IT Security 9

10 Liabilities Of The Individual Expsure t risk is n lnger just a business cncern as individuals we are ften expsed t risks frm ur prfessinal endeavurs, smetimes unknwingly: As a Directr r Officer (Manager/Supervisr) Yu can be persnally liable fr prsecutin and civil actin as a result f alleged wrng ding in yur prfessinal life and yur liability if pursued is UNLIMITED! Expsure typically cmes frm allegatins f wrng ding in respect t; Breach f Health & Safety Plicy Financial Mismanagement Emplyment Law 10

11 Breach f Health & Safety Plicy Directrs &/r Officers are increasingly being named as secnd defendants in the event f persnal injury due t Phenix Cmpanies aviding liability Legislatin is becming mre and mre rigrus and nerus N Win, N Fee cmpensatin culture has resulted in a significant increase in litigatin Crprate Manslaughter Prsecutins are nw very real 11

12 Crprate Manslaughter Ctswld Getechnical Hldings Alex Wright was 27-years-ld when he died n 5 September He was a gelgist fr Ctswld Getechnical Hldings and was investigating sil cnditins in a deep trench n a develpment plt in Strud when it cllapsed and killed him. Mr Wright was left wrking alne in the 3.5 metre-deep trench t 'finish-up' when the cmpany directr left fr the day. The walls f the trench cllapsed and a surge f sil buried Mr Wright cmpletely. Mr Wright died f traumatic asphyxiatin. Mr Peter Eatn, Directr f Ctswld Getechnical Hldings, was prsecuted under the Act and charged with the unlawful killing by grss negligence. The Cmpany Was Fined 380,000 N.B. Fines can NOT be cvered by any insurance 12

13 Financial Mismanagement Claims can arise frm allegatins, irrespective f hw spurius and incur csts! e.g. Sharehlders pursue directrs fr lss f share value due t Alleged negligent management 13

14 Emplyment Law Actins can be brught against bth the business and the individual as a result f allegatins f; Bullying Harassment Discriminatin Prcedure dminated envirnment Career Claimants 14

15 Risk Transfer Insurance is the mst cmmn risk transfer mechanism but buying insurance des nt abslve an individual and/r business f respnsibility Systems and prcess require an investment f bth time and mney and ften bth are in shrt supply What is mre imprtant t a business wner, having the best prcesses and systems in place r knwing that all liabilities are cvered and requirements met? I suspect bth. 15

16 Slutins Prperly managed insurance prgram which keeps pace with business evlutin Directrs & Officers Liability Insurance affrdable blanket prtectin Supprt with Health & Safety cmpliance peridically updated Supprt with Emplyment Law cmpliance peridically updated Brkers and insurers can prvide electrnic prtal systems which prvide dcuments and prcess/prcedures t assist with the abve. 16

17 Q&A Sessin with Niclas Oldham Partner fr Mills & Reeve LLP Niclas is a Partner fr Mills and Reeve LLP a tp 50 Law Firm. Niclas specialises in prfessinal negligence claims and ver the last 20 years, has specialised in dealing with claims against cnstructin prfessinals. Niclas Oldham Partner Mills & Reeve LLP Tel: +44(0) Funtain Huse, 130 Fenchurch Street Lndn EC3M 5DJ [email protected] 17

18 Cver: Cntract wrks Public liability Prfessinal Indemnity Type f plicy: Trigger fr indemnity: Categries f lss cvered: Emplyer r cntractr single prject all risks Cntractr annual all risks Physical damage t the wrks (e.g. by fld / fire etc) ccurring prir t cmpletin r during the defects perid (Inherent defects i.e. design / wrkmanship excluded but cver written back t varying degrees) The cst f reinstating / repairing damaged wrks Walks the plank (i.e. indemnifies first even if anther plicy culd cver the lss) Emplyer r cntractr single prject all risks Cntractr annual stand alne r all risks (ften with Prduct Liability) Legal liability t pay damages t a third party Accidental lss r damage ccurring during plicy perid (Design excluded) Third party claims fr: Damage t existing structures Damage t third party prperty Death and bdily Injury Financial lsses cnsequent upn physical damage Cntractr r cnsultants annual and stand alne (usually) A claim (r ptential claim) arising frm prvisin f prfessinal services Claims made during plicy perid (Wrkmanship excluded) Third party claims fr: Damage t r defects in the wrks Damage t existing structures Damage t third party prperty Persnal Injury Cnsequential and financial lsses (Plus mitigatin csts incurred t avert a claim under the plicy - D&B cver nly) Categries f lss nt cvered: Repairing inherent defects in the wrks Damage t existing structures Damage t third party prperty r persnal Injury Damage t r defects in the wrks Pure financial lss (unless there is a financial lss extensin) Claims cvered by ther insurance Pricing risk (i.e. increased csts caused by errrs in calculating the tender price) D&B cver nly Claims cvered by ther insurance Cnsequential r financial lsses 18

19 Our Missin T be the wrldwide value and service leader in insurance brkerage, emplyee benefits, and risk management Our Gal T be the best place t d business and t wrk Lcktn, Inc. All rights reserved. Images 2011 Thinkstck. All rights reserved. Lcktn Cmpanies LLP. Authrised and regulated by the Financial Services Authrity. A Llyd s Brker. 24