Insurance can be an effective and EFFICIENT way to handle risk when it is used in a well-constructed fashion. The board will want to consider high-level issues such as:

• Is the right set of risks covered; i.e. those that are less predictable, require special expertise and are beyond the financial wherewithal of the organization to withstand?
• Are the right limits being purchased; i.e. is the value of the policy high enough to TRULY cover a major loss?
• How highly is the insurer rated, and what is its claims service reputation.

A way in which the board can judge the merit of the ANSWERS to these questions is to find out:

• the kind of analysis that was done to determine the insurance program
• who did the analysis
• WHETHER there is benchmark information to look at from comparable organizations.

There are, undoubtedly, other questions that the board may need to ask. These are an excellent starting place for getting a sense of how well the organization is ADDRESSING risk.

Insurance can be an effective and efficient way to handle risk when it is used in a well-constructed fashion. The board will want to consider high-level issues such as:

A way in which the board can judge the merit of the answers to these questions is to find out:

There are, undoubtedly, other questions that the board may need to ask. These are an excellent starting place for getting a sense of how well the organization is addressing risk.