How can a company show insurers it is managing its risks effectively?

A company can demonstrate to insurers that it is effectively managing its risks by engaging positively in risk management. This involves implementing strategies to identify, assess, and mitigate potential risks that could impact the company’s operations or financial stability. By taking proactive steps to manage risks, such as conducting regular risk assessments, developing risk management plans, and fostering a risk-aware culture, a company can provide evidence to insurers that it is committed to minimizing exposure to potential losses.

In contrast, increasing the risks taken does not convey effective risk management; rather, it undermines the company's stability and might raise concern for insurers. Ignoring risk assessments fails to acknowledge potential hazards and indicates a lack of due diligence, which is likely to be viewed unfavorably by insurers. Lowering coverage limits could signify an attempt to manage costs rather than a genuine assessment and reduction of risk, which would not effectively demonstrate a commitment to risk management.