How to Professionally Assess Your Company’s Risks
The goal of risk management is not to predict every possible incident. It is about identifying, analysing, and effectively managing the risks that could significantly threaten a company’s ability to achieve its strategic and operational objectives.
This article provides professional guidance on how companies can practically begin or review their risk assessment process.
1. Start with Strategically Significant Risks
The starting point is to ask: what could happen that would significantly affect our company’s operations, revenue, or reputation?
A risk assessment should focus on:
Potential financial losses
Impact on customers, employees, or partners
How long business operations could be disrupted
Legal or regulatory consequences
Impact on the brand and market position
2. Analyse the Main Risk Categories Systematically
Use risk categories to assess potential threats. The main areas of business where significant risks tend to arise include:
Risk area | Examples |
Property and infrastructure | Fires, floods, electrical system failures, physical access breaches |
Employees and safety | Occupational illnesses, workplace accidents, employment-related claims |
Third-party liability | Claims from customers or visitors, damage to third-party property |
Professional liability | Consulting errors, design or execution defects |
Cyber risks and data protection | Cyberattacks, data breaches, system outages |
Transportation and logistics | Damaged deliveries, loss of cargo, vehicle accidents |
Business interruption | Dependence on specific suppliers, resource shortages, power outages |
3. Assess the Likelihood and Impact of Each Risk
Risk management commonly uses a risk matrix, which evaluates a risk based on both its likelihood and its potential consequences.
Risk | Likelihood (1–5) | Impact (1–5) | Risk level |
Cybersecurity incident | 3 | 5 | High |
Warehouse flooding | 2 | 4 | Medium |
Consultant error | 1 | 5 | High |
Transport delay | 4 | 2 | Medium |
This table helps establish priorities and identify where additional protection or investment in preventive measures may be required.
4. Do Not Rely Solely on Past Experience
The fact that an incident has not happened before does not mean it cannot happen in the future.
A professional approach should also include:
"Near-miss" analysis, examining incidents where losses were successfully avoided
Analysis of industry trends, such as the increase in cyber incidents
Assessment of the impact of climate and technological changes
Attention to new legislative and regulatory requirements
5. Involve Different Functions Within the Company
Effective risk assessment is not solely a management responsibility. It requires cross-functional collaboration:
Function | Contribution |
Finance team | Helps estimate potential financial losses |
IT team | Assesses risks relating to data, systems, and access |
Human resources | Identifies occupational health and safety risks |
Operations management | Identifies weaknesses in operational processes |
Good practice may include establishing a risk committee or working with an external risk management consultant or insurance broker.
6. Compare Identified Risks with Existing Insurance Coverage
The final stage is to review the extent to which the identified risks are already fully or partially covered by existing insurance policies:
Risk | Covered by insurance? | Are the limits sufficient? | Are the terms clear? |
Cyberattack | Yes, partially | Low limits | Ambiguous wording |
Liability to a customer | Yes | Good | Several exclusions, should be reviewed |
Property damage | Yes | Sufficient | Coverage applies only to certain risks |
This approach helps companies make informed decisions about renewing or adjusting their insurance policies.
7. Repeat the Process Regularly
A company’s risk profile changes as the business develops. Risk assessments should be repeated:
Once a year
Following significant changes to the company’s structure, technology, or suppliers
Before purchasing new insurance policies or conducting an insurance tender
Conclusion: A Professional Risk Audit Pays Off
A structured, data-driven risk assessment is not simply a box-ticking exercise. It is a tool that:
Reduces financial losses
Improves the effectiveness of insurance coverage
Helps management make more informed decisions
Demonstrates responsible corporate governance to partners and investors
If you are currently unsure whether your insurance coverage adequately reflects your company’s risks, we at Perks Brokers can help assess your current situation and recommend the appropriate course of action from a professional perspective.
Frequently Asked Questions
How do you assess a company’s risks?
Company risk assessment begins by identifying the most significant threats and evaluating their likelihood and potential impact. Factors to consider include potential financial losses, business interruptions, effects on customers and employees, legal consequences, and reputational risks.
What are the main categories of business risk?
The main risk categories include property and infrastructure risks, employee safety, third-party liability, professional liability, cyber risks and data protection, transportation and logistics, and business interruption.
How often should a company conduct a risk assessment?
A risk assessment should be conducted at least once a year, as well as following significant changes to the company’s structure, technology, or suppliers and before purchasing new insurance policies or conducting an insurance tender.
How does risk assessment help a company choose appropriate insurance coverage?
Risk assessment allows a company to compare identified risks with its existing insurance coverage, check whether insurance limits are sufficient, and review policy terms and exclusions. This helps the company make informed decisions about renewing or adjusting its insurance policies.
Author: Guntis Zoldners
Insurance Broker | Founder of Perks, Riga Latvia
Working in the insurance industry since 2007 and setting a new standard for brokerages in Latvia, keeping client interests first - always.
+371 26 668 558
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