Early warning system for corporate risks

Three risk categories:

• Risk category 1: Existence and total loss risks
• Risk category 2: Management liability up to private assets
• Risk category 3: Securing personnel and liquidity

Risk category 1: Existence and total loss risks
People-related risks in particular are often suppressed. In order to make them transparent, it is usually sufficient to answer a few questions: What economic deficit arises if a key person in the company is absent, whether due to accident, serious illness or death? How are the continuation of the company and the financial provision for the family guaranteed in such emergencies? Another source of danger is the area of natural hazards. Entrepreneurs paid for this negligence with their livelihoods during the floods in 2016. Cybercrime, fraud by employees, and damage to customers that is not covered by classic business and professional liability insurance policies also sometimes have a massive impact. This leads to economic problems and possibly to reputational damage. Hacker attacks in particular are increasingly affecting SMEs, not just large corporations such as Telekom, whose router failures cut off hundreds of thousands of T customers from the network at the end of November.

Risk category 2: Management liability up to and including private assets
Management and liability traps that arise from non-compliance with laws and compliance violations affect the entrepreneurs and executive bodies personally. In addition, each manager is also privately liable for his or her colleagues across departments. It is important to prevent managers from having to assume liability for violations by third parties with their own private assets. Business owners must be clear whether legal requirements, e.g., in the areas of occupational health and safety and data protection, have been met, so that liability risks for the business owner are excluded in the event of damage, because: Ignorance does not protect against the consequences.

Risk category 3: Securing personnel and liquidity For some years now, there have been government subsidies and measures that can lead to economic relief and valuable employee retention, but these are largely unknown. Here the quick check uncovers potentials, gives assistance and options for action for better liquidity in the company. For the self-employed and owners of an SME - the path from risk to hedging always involves three steps.

3 steps from risk to hedging

Step 1: Quickly analyze the situation, identify unrecognized risks and liability threats.
CONAV's easy-to-use initial analysis quickly uncovers the grossest internal and external threats without costly up-front testing.Only clearly identified threats are examined in detail.These are precisely elaborated and presented - indispensable prerequisites for any prevention.

External corporate threats include market developments such as the impact of the low-interest policy on company pension plans, even if these consist solely of deferred compensation. This is because employers are liable for the pension commitments made by third parties. For example, business owners may be obligated to compensate a pension fund or insurance company for a reduced payout.

Step 2: Develop internal plans for prevention and dealing with emergencies
Consideration must be given to how to deal with hazards and liability cases. Against which risks must precautions be taken? Which suitable solutions, safeguards and practical precautions are used? Foreseeable hazards must be prevented, an action plan is needed for the occurrence of an emergency and, in the worst case, it is important to obtain economic compensation.

Step 3: Take out insurance for all relevant risks with an independent broker.
What entrepreneurs often don't realize is that many risks can be insured at favorable rates. This requires market knowledge from specialists who offer optimally negotiated contracts, free of traps in the fine print.Entrepreneurs cannot expect such contracts from dependent employees in the insurance industry. The best possible conditions are available from an independent insurance broker with sufficient entrepreneurial and consulting experience. CONAV offers its customers exclusive framework contracts with additional benefits in terms of content, which also compensate to a significantly greater extent in the event of an emergency. The framework contracts created through an association (VSAV e. V.) usually have more comprehensive protection and offer up to 20 percent annual savings on premiums. In addition, the contents are constantly optimized, if possible free of charge; the protection virtually grows with the company and the entrepreneur.