Risk management is intended to minimize financial and other losses that are potentially associated with risks to your assets, business or health.
Some examples of risk are personal and professional liability, business ownership, property loss and catastrophic illness or disability.
1| First line of defense: Identify your sources of risk
WEALTH – Lawsuits, accidents, property damage and other financial risks are facts of everyday life. Asset protection planning looks to transfer the risk of these events through: insurance, repositioning asset ownership and other protections available under the law.
BUSINESS – Starting and running a business carries its own set of risk exposures. Certain factors can have a huge impact on the safety of your personal assets are from, risk. For example: business entity type, state laws, business management strategies, human resource and taxation.
GENETICS AND LIFESTYLE CHOICES – Genetics and lifestyle affect your risk profile. Being overweight, eating poorly, failing to exercise, smoking, driving unsafely and not wearing a seatbelt and taking appropriate safety measures can increase your insurance premiums. On the other hand, making healthier lifestyle decisions can help to reduce your insurance premiums.
2| Second line of defense: Avoid or minimize the major exposures
3| Third line of defense: Insurance