NON-PROFESSIONAL RISK MANAGER

In giant corporations, the risk manager can devote full attention to the problems of pure risk. In smaller firms, this executive probably has other duties as well. In the smallest firms, the risk manager may very well be the person who manages everything. This person's job as risk manager is an extremely heavy burden; for it demands the utmost precision if loss is to be avoided. Decisions must be made as to what kind of insurance is to be purchased, how much, and from whom. If the insurance coverage is inadequate and a loss occurs, the firm will suffer a financial loss. If, on the other hand, the business is overinsured, the loss in wasted premiums is just as real.

Certainly, the non-professional risk manager needs all the help he or she can get. Such an administrator may seek and obtain advice from many sources to assists in making decisions, but in the last analysis, the decision remains that one person's burden. Unfortunately, the risk managers who must depend on the services of others cannot always be certain that their advisers are genuinely interested in advising as distinguished from selling. For this reason, the no-professional risk manager should understand and appreciate the principles of risk management. The manager msut also know enough about the problem to recognise whether the advice is any good. The manager must also know enough about risk management to know when help is needed and must then be able to determine if he or she is getting the right kind.