Market & Policy · Insurance Term
Risk Management
Definition
Risk management is the process of identifying what could cause losses for your property or business and deciding how to handle each risk — avoid it, reduce it, transfer it or keep it. Insurance is one tool among several.
In Plain English
Good risk management starts with a list: what can go wrong, how likely it is, and how costly it would be. For a property owner, that might include fire, hail, flood, slip-and-fall injuries, tenant defaults and data theft.
Then you choose a strategy. You can reduce risk with maintenance and safety systems, often guided by a loss control inspection. You can shift risk through contractual risk transfer in leases and vendor contracts. And you can insure it, or keep part of it through deductibles or a self-insured retention.
Some larger owners form a captive insurance company to insure part of their own risk. Smaller owners usually focus on maintenance, contracts and sensible deductibles.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical and simplified: an owner of three strip centers reviews claims history and finds most losses come from roof leaks and parking lot falls. The owner budgets for roof maintenance, adds lighting, requires tenants to carry liability insurance naming the owner, and sets the property deductible at an amount the owner can comfortably pay.
What to Watch For
- List your top risks for each property, using loss runs and inspection reports.
- Review leases and vendor contracts for insurance and indemnity requirements.
- Set deductibles at a level your cash reserves can absorb.
- Revisit the plan when you buy, sell or renovate a property.
Last updated October 14, 2026 · Primesure editorial team · How We Write