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Managing Risk Without Insurance


Most of my articles focus on how you can transfer risk by purchasing insurance to transfer that risk to an insurance company. However, there are additional ways to control risk.

One of these ways is called risk separation. In its basic form, it is a risk control method that involves separating key assets to prevent them all from being lost in the event of a catastrophe. 

I remember this strategy as a young child.  When my behaviour eroded throughout my childhood, common punishment for me was to lose my hockey card collection for a period of time to encourage improved behavior. After suffering through several weeks of life without hockey cards, I started implementing a risk control program that separated my hockey cards into several strategic storage areas, different packaging and methods of disguise to prevent all of my cards from being confiscated at the same time. 

It’s interesting that I am now employed to provide similar advice and strategies. Risk separation on a farm can be as simple as having several storage sites for your grain storage so that a tornado, fire or meteor strike does not jeopardize all of your inventory at one time. Storing farm machinery in multiple sheds, locations and sites is another important strategy to avoid losing all of your machinery in one loss.  Parking your fleet of trucks and trailers in a straight line looks great on social media, but also lines them up like bowling pins in the event of a fire or plow wind.

There are many well managed farms that intentionally separate their crops to avoid catastrophic results from having the same soil conditions, moisture, hail storm, etc. from wiping out a specific crop.  Even though government run crop insurance programs can actually reward farms who “put all of their eggs in one basket” by planting each crop together in a small geographical area, risk separation is a wise decision for the best possible results each year.

Separation of key personnel is also crucial to consider whether you are running a family farm, a small business, or are serving on a board of directors, management team, etc. Booking tickets on separate flights, taking separate vehicles to events, and booking your back-woods camping trips at separate times provides some separation should a catastrophe occur.

So, the next time you are planning a team sky-diving event, or are thinking of parking all four combines next to each other in your shed during harvest, think of risk separation. And please, whatever you do, don’t put all of your hockey cards in the same box!

Would you like to work with an insurance broker who provides advice, not just insurance? Consider making Rempel Insurance Brokers your insurance broker of choice. We work hard to make sure our clients have the resources required to make good decisions on risk.

Be sure to seek advice and purchase insurance from those who understand your business!

David Schmidt is an Account Executive at Rempel Insurance Brokers in Morris, MB, specializing in insuring farms and businesses across Manitoba and Saskatchewan.  Office (204) 746-2320 Text (204) 712-6618 Email Web