What's Your Risk Tolerance?

Evel Knievel is dead. If you are my generation or older, you remember the American daredevil icon from the 1960’s and 70’s. It’s surprising my opening statement wasn’t said about Knievel many years go! Knievel just passed away a few days ago at the age of 69 of natural causes.

Knievel was known for attempting huge life-threatening risks, like jumping over the Snake River in Idaho on a motorcycle, or jumping a long row of trucks. Evel understood the risks but his tolerance was more than the average Joe was willing to take. The consequences of his risks were broken bones, a battered body, and potential death. It is surmised that his health challenges in later years were exacerbated by his many injuries.

What’s your risk tolerance for your business? What risks are you willing to self-insure? Have you ever given it much thought? Your business faces many risk exposures on a daily basis. Risks like fire, liability, and employee dishonesty. Based on your financial position, you may be willing to self-insure a larger amount than the average Joe to save some premium dollars. On the other hand, you may not have that luxury and need to have a lower deductible. Regardless of where that limit is, you need to know what it is and set your deductibles accordingly. If you don’t, you’re paying too much for your insurance.

Talk to your agent about risk tolerance. If he or she doesn’t know what you’re talking about, you may need to find another agent. Being an Evel Knievel with your insurance rarely makes sense, unless you are financially able to withstand the blows. If you’re not, your business may be in for a premature demise, too.

Dan

P.S. Need some unbiased advice on just how to determine your risk tolerance? How about if you just want to know if you’re paying too much for insurance or if you’re adequately protected? Join the new Toro Insider today and find out how you can take control of your insurance costs. To learn more, click here…