ABSTRACT
The aim of insurance and risk management due diligence is to reduce the costs of risk. The basic, driving philosophy behind risk management is that as losses are funded either directly or through the payment of insurance premiums, they should be seen as a cost which can be reduced. Risk management uses a qualitative approach to examining potential exposures faced by the business. The risk management structure must strike a proper balance between risk and cost if it is to give the right coverage at the right cost. A risk management programme should highlight those areas where insurance is appropriate and provide options based on variable levels of self-insured risk retention combined with practical steps to reduce exposures, whether insured or not. There is an area where insurance is not cost-effective or quite simply unavailable. Often selecting the right insurance broker can have a significant influence on cost.
